Companies

Alcohol firms directors risk prosecution over Sh1bn tax

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The Kenya Revenue Authority headquarters in Nairobi. FILE PHOTO | NMG

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Summary

  • The Kenya Revenue Authority (KRA) told Parliament that the firms failed to declare bottles and tops that were imported for packaging of various alcoholic brands and spirits in the year to June.
  • The firms that include Keroche Breweries, Platinum Distillers, Two Cousins Distillers and Africa Spirits failed to declare 33 million imported glass bottles and 16 million tops.
  • This is from 330,726,713 glass bottles and 426 million tops that were imported by the manufacturers in the year ended June.

Top directors of at least four alcohol brewing and packaging firms risk prosecution and freeze of their bank accounts for tax evasion estimated at over Sh1 billion.

The Kenya Revenue Authority (KRA) told Parliament that the firms failed to declare bottles and tops that were imported for packaging of various alcoholic brands and spirits in the year to June.

The firms that include Keroche Breweries, Platinum Distillers, Two Cousins Distillers and Africa Spirits failed to declare 33 million imported glass bottles and 16 million tops.

This is from 330,726,713 glass bottles and 426 million tops that were imported by the manufacturers in the year ended June.

Parliament was informed that duty on undeclared bottles and tops were over Sh1 billion.

KRA told Parliament that it has already served the firms with the demand notices setting the stage for prosecution of the directors and seizure of the firms’ assets if they fail to comply.

“The authority has conducted an in-depth audit of the companies and their directors and the findings so far have indicated non-compliance,” KRA told Parliament.

“KRA has identified various non-compliant companies and has taken appropriate recovery measures and prosecution.”

The taxman told Parliament that some of the firms are fighting off the tax demands. Platinum Distillers appealed the Sh479 million demand in efforts to lower the taxes due.

Lawmakers had while pushing KRA to probe the firms said that the imported bottles were subsequently refilled with various brands of liquor, sealed with fake stickers and excise stamps and sold to unsuspecting customers, denying the government unspecified revenues.

While imported bottle tops have for years attracted excise duty making them easy to account for during tax assessment, bottles had remained outside the excise tax radar until mid this year when legislators amended the law and imposed the taxes.