Taxpayers could lose more than Sh526 million over 4,000 metric tonnes of imported sugar that Kenya Revenue Authority detained for more than a year despite being shipped under duty- free arraignments between 2007 and 2008.
The consignment that was imported by Akaba Investment was illegally detained by the taxman for more than one year before being released to the company in December 2008.
In a ruling by Mombasa High Court Judge Patrick Otieno, KRA is supposed to pay the importer the money, being damages suffered when the consignment was illegally detained over tax dispute.
The judge said Akaba Investment sufficiently proved that as a result of the wrongful conduct by KRA, its operations were disrupted, was exposed to business losses in anticipated profits and additional storage charges and financial costs.
“The upshot is judgment is entered for the plaintiff against the defendant for the sum of USD 1,132,460 and Sh405,108,353 as special damages with interest thereon at court rates from the date of filing suit until payment in full,” said the judge in a judgment dated May 5.