CS Ndung’u snubs MPs, again, in probe into multi-billion-shilling tender

Parliament has given the Treasury Cabinet Secretary Njuguna Ndung’u one last chance to shed light on a multi-billion shillings’ tender for provision of excise tax stamps.

Prof Ndung'u for the third time snubbed MPs' invitations to answer questions on the status of the new Excisable Goods Management System (EGMS) where the Kenya Revenue Authority (KRA) has advertised.

The National Assembly’s Finance and National Planning committee said it received a letter that Prof Ndung'u engaged in State House to sign bilateral agreements with the Prime Minister of Singapore who is in the country.

Prof Ndung’u was expected to respond to questions filed by Leader of Minority Opiyo Wandayi who raised the red flag over claims that the Kenya Revenue Authority (KRA) was about to renew the excise duty stamps contract to a Swiss multinational security printer, Sicpa.

Mr Wandayi warned the expiring contract will cost taxpayers more than Sh162 billion in five years based on the previous contract that put the contract proceeds to be Sh81 billion.

“This is the fourth time the CS has failed to honour our invitations. Our Standing Orders provides that a witness who fails to honour invitations three times. He has requested seven working days to prepare comprehensive answers to this questions,” Kimani Kuria, who chairs the committee said.

"We dont want to issue summonses but we allow the CS a chance to appear on May 29, failing which we will issue summons."

Prof Ndung’u was required to provide the status of the new Excisable Goods Management System (EGMS) where the Kenya Revenue Authority (KRA) has advertised.

The KRA and Sicpa entered into a contract for provision of the EGMS, including printing of stamps for excisable goods such as soda, bottled water, fresh juices, beer, spirits, cosmetics and cigarettes, since 2013.

The Swiss firm is among the firms bidding for a new contract for the provision of excisable stamps estimated to cost Kenya Sh162 billion for five years.

The committee has also summoned the KRA over the multi-billion shillings’ tender after it emerged that Sicpa had been slapped with a Sh12.5 billion fine for bribing foreign public officials in the conduct of business.

The Sicpa Security Solutions (SICPA) SA, was fined CHF81 by Switzerland authorities after it was found culpable of abetting corporate criminality in connection with acts of corruption.

The fine translates to approximately Sh12.5 billion going by the current exchange rate of CHF1 to Sh154.

The multinational security printer was fined by Switzerland Office of Attorney-General after its employees were found culpable of bribing foreign public officials in the conduct of business in Brazil, Colombia and Venezuela.

Sicpa has since defended its excise duty stamps deal with the taxman, saying it is above board.

In a paid-up advertisement carried in the local dailies on Wednesday, Sicpa dismissed claims that the EGMS had led to an increase in the price of excise stamps.

 “SICPA systems are often attacked by those who would prefer that they are not implemented – often because they stand to gain from a continuing lack of effective controls,” the Swiss firm said.

“Despite their opposition, SICPA is committed to continue supporting government efforts to combat illicit products.”

The firm dismissed claims that it has turned a profit of Sh64 billion in five years as “fantasist and exaggerated.”

“SICPA bears a significant cost for the design and implementation of a system adapted to revenue authorities’ requirements, the provision of extensive high-tech industrial equipment to cover all manufacturing sites in Kenya… currently, SICPA employs 133 full-time employees in Kenya in the operations, support and maintenance of the system,” it said.

The EGMS was introduced by the KRA as a means of improving excise revenue collection through a track and trace solution.

Its implementation started with tobacco, wines and spirits, but was later expanded to cover soft drinks, juices, water and cosmetics.

[email protected]