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Chemelil seeks KRA repayment plan for Sh1bn debt

The Chemelil Sugar Company factory. FILE Photo | Tonny Omondi | NMG
The Chemelil Sugar Company factory. FILE Photo | Tonny Omondi | NMG 

Chemelil Sugar Company has now called on the government to negotiate with the taxman to settle its Sh1 billion debt on a manageable repayment plan.

The miller’s chairman, Benson Owiti, said the debt burden has made it difficult for the firm to cater for overhead costs incurred in day-to-day running of the business.

“On behalf of the company, we request the government to undertake negotiation with KRA (Kenya Revenue Authority) to facilitate restructuring of the debt based on a manageable repayment plan,” he said Tuesday.

Mr Owiti indicated that the company has an outstanding debt estimated at Sh1 billion, excluding penalties.

The move comes as County chiefs from Kenya's sugar belt called for the write-off of taxes in order to re-engineer management of the factories which are facing hardships in the wake of cane shortages and financial distress that has hit firms.

Kisumu Senator Anyang’ Nyong’o underlined the need to initiate Rapid Results Initiatives (RRI) by both the national and county governments to get millers out of their current rut.

Speaking during the National Sugar Industry Stakeholders consultative meeting held in Kisumu last week, Council of Governors Agriculture chairman Okoth Obado said urgent measures need to be taken to save sugar firms from collapsing.

“We need to promote research on crop varieties that give good yield and commercialisation of seed cane production,” he said.

Bailouts

The national government this month bailed out Chemelil Sugar Company famers with a Sh300 million payout to help settle debts accrued by the firm between 2014 and June 2017.

Agriculture Cabinet Secretary Willy Bett also promised to assist the management of Chemelil to pay Sh315 million salary arrears dating back to eight months ago.

Mr Bett noted the move was important in motivating staff and reducing the heavy financial burden currently being borne by the company.

“Farmers, staff and an efficient factory are equally important in ensuring that operations of Chemelil Sugar Company run smoothly. Addressing one and leaving out the other will be detrimental to the survival of the company,” he said.

To address problems facing the sugar sector, the Agriculture CS noted that his ministry would soon release key regulations that will guide operations of the industry.

“My ministry will ensure that all millers invest in cane development to ensure adequate cane availability commensurate with their milling capacities as this is the sure way to avert shortages,” he stated while issuing the cheque at the Chemelil Sugar Company earlier this month.

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