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KRA wants Water ministry to pay Sh8m tax after firm it contracted for Mwache dam failed to remit tax

Tender was for for consultancy services for implementation of Mwache dam resettlement action plan

In Summary
  • The Sh342m tender also included resettlement of the vulnerable and marginalized group plan.
  • Phase one of the project will affect at least 4,000 residents.
A portion of River Mwache where the dam wall will be constructed.
PROJECT: A portion of River Mwache where the dam wall will be constructed.
Image: FILE

The tax man has demanded that Water ministry to pay Sh8 million after one of the firms it contracted for the Mwache dam project failed to remit taxes.

The Kenya Revenue Authority explained that as per the law, it had powers to compel the Water ministry to pay the money directly.

The Sh20 billion dam project is being constructed at Kasemeni ward in Kinango subcounty, Kwale county. It is funded by the World Bank and the national government.

The tender in question was awarded in 2019.  It was for consultancy services for implementation of Mwache dam resettlement action plan.  

The Sh342m tender also included resettlement of the vulnerable and marginalized group plan.

“In exercise of the powers conferred upon me by Section 42 of the Tax Procedures Act, 2015, I hereby declare you to be an agent of the above taxpayer and require you to pay me the sum of Sh 8,362,851.09 being tax due by the said taxpayer,” said KRA in a letter signed by Geoffrey Sigei, Northern region operations manager.

In April, the government announced that the construction of the Mwache dam had started after the completion of rehabilitation works and the compensation of residents.

The dam will be 87.5 meters tall, targeted to impound 118 million cubic meters of water.

It will harness water from the overflowing Mwache river and strengthen daily supply of 186, 000 cubic meters of water to Kwale, Mombasa and Kilifi.

The entire project will affect about 12,000 residents and 3,220 households from 20 villages.

Phase one of the project will affect at least 4,000 residents.

The project runs from Fulugani to Pemba villages.

On July 20,220, the Ethics and Anti –Corruption Commission was asked to investigate the issuance of the consultancy services for implementation of Mwache dam resettlement action plan.

The commission was asked to investigate if the issuance of the tender was above board and in accordance with the law.

 

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