The State risks losing Sh375.9 million that is due from Savannah Cement Company after the High Court stopped the collection of levies from the firm.
Savannah Cement told Parliament that it had secured conservatory orders stopping the Ministry of Mining from collecting cement levies that have accrued from 2016.
The ministry is demanding payment of Sh375,862,635 that had accrued in cement minerals levy as of the end of June 2020.
The cement maker moved to the High Court to challenge Legal Notice No. 222 of 2013, which required payment of cement minerals levy by all cement producing companies in Kenya.
Savannah moved to court despite striking a deal on a payment plan agreement with the Mining department in August 2017.
The agreement, signed between the State Department and the company, required settlement of the arrears in 24 monthly instalments starting from September 2017.
The company reneged on the plan stating that it did not hold a mineral license from the State Department and, therefore, was not liable to pay the levy.
“We went to court on the aspect of the constitutionality of the Mining Act, 2016 and the Legal Notice No.222 of 2013,” Samson Shivina, Savannah Cement managing director, said.
“When there is double taxation, it creates illegality and unconstitutionality in law. On the interim basis, the courts granted us conservatory orders on July 27, 2020,” he said.
Mr Shivina told the Public Accounts Committee (PAC) that Attorney General Kihara Kariuki proposed to settle the matter out of court.
“We were to record consent before the matter comes up on July 13, 2020. We have no contents of consent which is a proposal from the AG. They have written to have the matter settled out of court with regards to payment of the levy,” he said.PAC chairman Opiyo Wandayi, MPs Aden Duale (Garissa Township), Ojiambo Oundo (Funyula) and Peter Masara (Suna West) put the management of the Athi River-based firm to task over its decision to rush to court three years after committing itself to pay accrued levies.“In 2016, the levy was Sh285 million and you refused to pay. You have rushed to court to block the ministry from executing a payment plan. You are a private company that is stealing from the public,” said Mr Duale.The suit by Savannah Cement mirrors that of four salt manufacturers who have sued the Kenya Revenue Authority (KRA) over a requirement that they must obtain permits from the Mining ministry before making […]
