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KPA boss under fire for Sh17.4m VAT drop on gate charges

Sophie Njoka @PeopleDailyKe

Kenya Ports Authority (KPA) has been put task over failure to charge Value Added Tax (VAT) on gate passes. Auditor General Edward Ouko has raised concerns over deduction of VAT amounting to Sh17.4 million in the 2013/14 fiscal year from Sh126 million thereby understating revenue income.

However, KPA managing director Catherine Mturi said the authority was unable to charge VAT on passes because it would have amounted to overcharging its customers.

She further told the committee that prior to December 1, 2014, the rates for the sale of passes and entry charges to the port were covered in the tariff, however, concerns on VAT were raised on notices to port users issued by the management.

“In December 2012, we realised that the rates were erroneously printed without factoring in VAT, however the printing error was corrected through a notice to port users dated January 24, 2013, the same year and it has no effect on the financial statement of comprehensive income as the accounting books correctly recognised that, therefore there was no under collection of revenue,” she said.

The Auditor General also sought explanation on why lease agreements of eight KPA rental properties were not renewed, exposing the authority to defaults in rent payments of more than Sh131 million as at June 30, 2014. Mturi said at the time of the audit, some information regarding the lease agreements were not availed to the Auditor General.

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