Companies

London Distillers boss charged with Sh2bn tax evasion

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London Distillers director Mohan Galot. NMG PHOTO

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Summary

  • The director of London Distillers Kenya Ltd Mohan Galot has appeared before a Nairobi court, facing tax evasion related charges totalling to more than Sh2 billion.
  • The prosecution stated that the distiller, which makes Kenya King, Napolean and Safari Cane, and its director devised a scheme of evading taxes, including excise duty on locally manufactured spirits, VAT and corporate taxes.

The director of London Distillers Kenya Ltd Mohan Galot has appeared before a Nairobi court, facing tax evasion related charges totalling to more than Sh2 billion.

The prosecution stated that the distiller, which makes Kenya King, Napolean and Safari Cane, and its director devised a scheme of evading taxes, including excise duty on locally manufactured spirits, VAT and corporate taxes.

According to the charges, the company was involved in a scheme of gross under reporting of production and sales volumes and purchase of packaging materials through associated companies.

It is alleged that the distiller purchased 272,989,752 bottles and the finished product volumes produced and omitted using the purchased bottles some 7,941,539 litres with an equivalent excise duty of Sh1.4 billion. Among the charges is that he omitted from excise duty returns for the years 2016 and 2017 for litres of ready, locally manufactured spirits.

Mr Galot denied a total of 18 counts of omitting from tax returns production volumes and sales amounts which ought to have been included contrary to sections of Tax Procedures Act, and failure to pay taxes of Sh1.4 billion.

The prosecution alleges that between January 2016 and December 2018 the company activated some 1,610,150 stamps in the EGMS system, which represented a production equivalent of 527,250 litres. The taxpayer however declared and paid taxes on only 359,162 litres, hence evading tax.

In 2017, the company allegedly failed to pay taxes amounting to Sh226 million, while the following year, LDK is said to have failed to pay tax amounting to Sh814 million.

Mr Galot denied all the charges and was ordered to deposit cash bail of Sh1 million to secure his release.