The East African Portland Cement (EAPC) failed to remit Sh4 billion in statutory deductions, including taxes and penalties, as of June 30, 2025, an audit has revealed. This exposes legacy liabilities facing the cement maker that recently transitioned to new ownership.
In a new report for the year ended June 30, 2025, Auditor-General Nancy Gathungu said the company had accumulated unpaid obligations, including value-added tax (VAT), pay-as-you-earn (PAYE), income taxes and related penalties.
“The company has been unable to settle its obligations in respect of statutory deductions, which include pay as you earn (PAYE) balance of Sh2,446,389,041, value added tax (VAT) balances of Sh1,471,531,165, and income tax-company balance of Sh81,510,917 being principal, penalties and interest,” Ms Gathungu said.
“The above events or conditions, along with other matters set forth in…the financial statements, indicate that a material uncertainty exists that casts significant doubt on the company’s ability to continue as a going concern.”
The release of audit reports often lags, and some of the captured issues may shift by the time of publication. It is not clear if EAPC could have offset the unremitted deductions.
Statutory deductions are mandatory withholdings from an employee’s gross salary that employers must compute, deduct, and remit to various government agencies by the ninth day of the following month. They include PAYE, the National Social Security Fund (NSSF), the Social Health Insurance Fund (SHIF), and the Affordable Housing Levy (AHL). Failure to remit such funds can result in penalties, interest charges and additional financial strain on businesses.
The audit finding means EAPC’s outstanding obligations have continued to build, adding pressure on a company in which Tanzanian businessman Edhah Abdallah Munif recently spent Sh2.32 billion to take a majority stake of 68.7 percent through his investment vehicle Kalahari Cement Limited.
He built up the EAPC stake by buying a 29.2 percent stake from Swiss multinational Holcim for Sh718.7 million or Sh27.30 a share in November 2025.
Mr Munif then acquired a 27 percent holding from NSSF for Sh1.604 billion, adding to the 12.5 percent he already controlled through Bamburi’s stake in EAPC.
EAPC registered a notable turnaround in fortunes in the financial year ended June 202, with its net profit growing nearly five-fold to Sh5.53 billion, compared to Sh1.16 billion a year earlier.
The company also announced a higher dividend of Sh1.25 per share for the period, up from Sh1 per share for the prior year. The performance meant that Mr Munif’s investment vehicle Kalahari Cement Limited would bag Sh77.3 million out of EAPC’s total payout of Sh112.5 million.
EAPC’s turnover more than doubled to Sh7.08 billion in the year to June 2025 from Sh3.28 billion the year before, attributed by the company to improved and consistent cement production, effective pricing strategies and strong demand recovery in key market segments.
