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Taxman reveals auction of Kenya Power transformers

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Taxman reveals auction of Kenya Power transformers


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Kenya Power workers during live-line maintenance. FILE PHOTO | NMG

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Summary

  • The taxman through the Kenya Gazette notice has given Kenya Power 30 days to clear the transformers that were shipped into the country seven years ago.
  • The KRA auction is linked to delays by Kenya Power in clearing taxes for the import of the transformers and storage fees.

The Kenya Revenue Authority (KRA) has issued a notice to auction Kenya Power transformers, reflecting cash flow hitches at the utility firm in a sale that will dim efforts to deal with blackouts.

The taxman through the Kenya Gazette notice has given Kenya Power 30 days to clear the transformers that were shipped into the country seven years ago.

The KRA auction is linked to delays by Kenya Power in clearing taxes for the import of the transformers and storage fees.

This comes at a time the electricity distribution monopoly is grappling with an ageing transmission network that has been blamed for power outages amid increasing system losses.

“Unless the under-mentioned goods are entered and removed from the Customs Warehouse within thirty (30) days from the date of this notice, they will be sold by public auction on August 12, 2021,” the KRA said in the Kenya Gazette last Friday.

The auction comes as the KRA aggressively pursues uncollected taxes and crackdown on wealthy tax evaders as part of its budget for the year starting July.

The taxman is racing to bring more people into the tax brackets and curb tax cheating and evasion in the quest to meet targets in an economy where Covid-19 economic fallout has battered collections.

It’s not clear why Kenya Power has delayed in clearing the transformers amid increased demand for the equipment as the country accelerates connectivity in rural areas.

This is the case at a time Kenya is suffering regular power failure owing to insufficient electricity generation capacity and a dilapidated transmission network, underlining the importance of new transformers.

Some of Kenya Power’s big consumers like firms, universities and factories have turned to solar photovoltaic grid-tied systems to supply power while others have bought stand-by generators due to the outages.

Kenya Power needs to spend billions of shillings to upgrade electricity lines and transformers in the coming years to curb outages and keep up with the growing demand.

The utility firm has in the last seven years increased its network by 56,611 kilometres to 84,681 kilometres while customer base jumped 3.3 times to 7.6 million.

It posted a pretax loss of Sh7.04 billion for its financial year to June 2020.

Vandals eye toxic oil that is drawn from transformers and is allegedly used for frying food at roadside stalls while copper wires from the equipment are sold to fix motors and as scrap metal.



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