Cement firms that fail to remit royalties will lose their operating licences if recommendations of an audit report are adopted by the mining ministry.
A task force report has recommended that the granting of licence be tied to payment of royalties or cement levy.
The team also wants payment records to be used as one of the licensing conditions.
The findings of the audit on revenue remittance indicate that most cement factories and others such as Central Glass Industries have applied either for mining licence or permit in accordance with the Mining Act 2016.
“To enhance royalty or revenue collection, we recommend that payment of royalty and cement levy should be one of the performance conditions,” the report, whose team leaders were Fred Wandera and Gregory Kituku states.
If the recommendations are implemented, three struggling cement makers, which owe the ministry Sh198.4 million in unpaid levies for the year to June 2016 will find it hard to renew their licences or permits.
Athi River Mining #ticker:ARM has arrears totalling Sh96.5 million while State-owned East African Portland Cement Company #ticker:PORT owes the ministry Sh68.3 million.
Savannah Cement has a balance of Sh20 million that is due to the State department.
In the report attached to a presentation to the Public Accounts Committee, the audit team wants enforcement of compliance with section 147(1) of the Mining Act that deals with revocation and suspension of licences and regulation 64(1) of the Public Finance Management Act, 2015 on responsibility for revenue management where applicable.