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Billionaire Jubilee Party sponsor stops arrest in Sh2.5bn tax row

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Billionaire Jubilee Party sponsor stops arrest in Sh2.5bn tax row


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Summary

  • The taxman is pursuing Ms Mungai over alleged unpaid taxes for the billions of shillings earned from government tenders for supplying boots, uniforms and cereals to the military, among other State departments.
  • The Treasury has announced a new crackdown on wealthy tax evaders as part of its commitment to the country’s creditors, setting the stage for travel bans, asset freeze and deactivation of Personal Identification Numbers (PINs).
  • The clampdown is revealed in a commitment that Kenya made to the International Monetary Fund (IMF) to recover unpaid taxes from high-net worth professionals and traders in efforts to raise the national revenues.

A Jubilee Party campaign financier is the latest billionaire to be pursued by the Kenya Revenue Authority (KRA) over Sh2.5 billion unpaid taxes from big ticket State tenders in agencies like the Kenya Medical Supplies Authority (Kemsa) and the military.

Mary Iambi Mungai, a member of the Friends of Jubilee Foundation lobby which raised millions of shillings for President Uhuru Kenyatta’s re-election campaign in 2017 in two hours, was last month summoned along with her two daughters to shed light on the alleged unpaid taxes.

Ms Mungai’s daughters Everlyn Nyambura and Purity Njoki Monday obtained a court order stopping their arrest for allegedly failing to honour the summons by the KRA.

The court was told that their billionaire mother was away in Zambia for undisclosed business deals.

The taxman is pursuing Ms Mungai over alleged unpaid taxes for the billions of shillings earned from government tenders for supplying boots, uniforms and cereals to the military, among other State departments.

The Treasury has announced a new crackdown on wealthy tax evaders as part of its commitment to the country’s creditors, setting the stage for travel bans, asset freeze and deactivation of Personal Identification Numbers (PINs).

The clampdown is revealed in a commitment that Kenya made to the International Monetary Fund (IMF) to recover unpaid taxes from high-net worth professionals and traders in efforts to raise the national revenues.

The taxman says Ms Mungai and her two daughters earned billions of shillings between 2014 and 2019 through their company Purma Holdings Ltd.

The KRA says it has been conducting investigations on tax obligations by the company for the past two years.

The court heard that they have been cooperating and have provided all documents and information demanded by the KRA.

“The commissioner has reason to believe that you, Mary Wambui Mungai, are culpable, connected to or have information that will assist us in our investigations into the identified offences,” says the letter sent to the businesswoman on June 23.

The KRA says the directors of the company were summoned on June 25 but failed to appear. Instead their lawyer appeared before the KRA and sought for an extension of the summons to June 28. Come the appointed day, says the KRA, the lawyer said the clients would not be attending because Ms Mungai was out of the country.

Fearing their arrest, her two daughters rushed to court seeking an anticipatory bail.

They told Justice Cecilia Githua that their mother was in Zambia on business assignments.

They also claimed that they resigned from the company on August 28, 2019 and transferred their shares to their mother.

The two daughters said they held 150 ordinary shares each and were incorporated as directors of Purma Holdings when they were minors.

“That the 3rd Applicant [Nyambura] and I ceased being directors of Purma Holdings when on realising that the two of us had other interest for our respective careers in life, our mother removed us,” Ms Njoki said in court documents.

Yesterday, Justice Githua directed the duo to sign a personal bond of Sh500,000 each and present themselves to the KRA on or before July 19 for questioning. The case will be mentioned on July 21 to confirm whether they complied with the directive.

“The applicants are apprehensive that the respondents are determined to have all of them in custody by all means possible and will abuse their powers in disregard of the Constitution to meet their objectives,” their lawyer, Walubengo Waningilo, said in the petition.

Ms Mungai has also been listed among persons who supplied Kemsa KN95 face masks and surgical face masks for a tender worth Sh30.5 million.

She also supplied personal protective equipment (PPE) kits worth Sh90 million. Both awards were made through direct procurement in June last year.

Kemsa has been fighting allegations of purchasing low quality items and inflating prices of others in the procurement of Covid-19 emergency equipment.

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KQ resumes Mumbai flights after 4 months

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KQ resumes Mumbai flights after 4 months


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A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG

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Summary

  • Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
  • The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.

The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.

Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.

“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.

KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.

The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.

Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.

India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.

Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.

India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.

A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.

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Lower import volumes push mitumba prices to new highs

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Lower import volumes push mitumba prices to new highs


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Man pulls a cart loaded with second-hand clothes at Gikomba Market in Nairobi. FILE PHOTO | NMG

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Summary

  • Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
  • Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
  • Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.

Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.

Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.

Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.

The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.

TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.

Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.

The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.

Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.

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Court backs Atwoli union in horticulture membership feud

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Court backs Atwoli union in horticulture membership feud


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Cotu boss Francis Atwoli. FILE PHOTO | NMG

Summary

  • A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
  • Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.

Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.

Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.

He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.

“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.

“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.

He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.

“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.

Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.

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