Posted on 27 Aug 2024
A lawyer has sued to stop the exemption of steel manufacturer Blue Nile Rolling Mills Ltd from paying taxes amounting to Sh188 billion.
The exemption, Apollo Mboya argues, was arbitrary, unprocedural and unconstitutional because it discriminated against other players in the industry.
The National Assembly, Cabinet Secretaries for Treasury and Trade and their Principal Secretaries, Kenya Revenue Authority (KRA) and the Attorney General are listed as respondents.
Devki Steel Mills Ltd, Kenya Association of Manufacturers, Kituo Cha Sheria, Blue Nile Rolling Mills Ltd, Competitions Authority of Kenya, Katiba Institute, Senator Okiya Omtatah Okoiti and Law Society of Kenya (LSK) are named as interested parties, court papers show.
The government, in 2022, exempted the company from paying all duties, levies and value added tax in an arrangement known as a special operating framework agreement.
Mboya, who filed the case at the Malindi High Court, says the CSs granted the exemption though they did not have the powers to do so.
The move, Mboya claims, has cost the country billions of shillings in unpaid taxes.
“One of these creatures is the agreement between the CS Treasury, CS Trade and Industry and Blue Nile Rolling Mills Limited dated January 30, 2020, that has orchestrated the colossal loss of revenue to the government in the sum of Sh188,957,415,195 and counting, at a time the country is fraught with unrest and economic hardship resulting from pilferage and mismanagement of government funds and resources,” Mboya contends.
Under the agreement with the company, he argues, the government has unjustifiably granted blanket tax exemptions and reduced tax rates for entities without public participation
Mboya wants the court to certify the matter as urgent and issue a conservatory order to suspend the implementation of the agreement.
With the tax exemption, the galvanised wire and steel manufacturer enjoys importing raw materials at a price that is 47 per cent lower for billets, and 62 per cent cheaper for wire rods compared with other steel manufacturers.
Source:People Daily
