The loss-making Postal Corporation of Kenya (PCK) has failed to remit employee and taxman dues amounting to Sh1.8 billion, underlining the deepening cash flow crisis.
Posta is struggling to honour payroll taxes and retirement benefits, according to a report submitted to lawmakers by Auditor General Nancy Gathungu.
“The trade and other payables balance included pensions and gratuities deductions amounting to Sh1.32 billion that had not been remitted to the staff pension scheme, Sh108.5 million due to Cooperatives and Sh305.6 million being staff bank loans deductions not remitted,” read the report.
“This is contrary to Section 19 (4) of Employment Act, 2007 which requires an employer who deducts an amount from an employee’s remuneration to pay the amount so deducted in accordance with the time period and other requirements specified in the law.”
Remittance of statutory, loan and members’ deductions to Saccos and banks are mandatory employer obligations.
“The payables included Sh585.1 million being statutory deductions, Value Added Tax withheld, customs and excise taxes and other taxes not remitted to Kenya Revenue Authority contrary to the rules made under Section 130 of the Income Tax Act,” said Ms Gathungu.
Ex-Posta employees have in the recent past petitioned the state to pay them their benefits.
Last November, more than 130 retirees in Kisumu protested about the non-payment of pensions by the corporation despite numerous efforts to push for payments.
In her report, the Auditor -General said Posta is technically insolvent even as she flagged financial rot running into hundreds of millions of shilling in the agency.