Economy

KRA sued over sale of 250ml liquor for Sh150

kra

Kenya Revenue Authority headquarters at the Times Tower in Nairobi. FILE PHOTO | NMG

Kenya Revenue Authority (KRA) has been sued for its failure to crack down on alcoholic spirits in 250-millilitre containers retailing at below Sh150 on fears they are not tax compliant.

In a petition filed at the High Court, Mr Justus Mombis, a bar operator, says retailers selling the 250-millilitre spirit below Sh150 are tax cheats and that production expenses and duty cost do permit alcohol to be sold at the price.

“There have been massive losses of revenue due to the government whereas the bodies mandated to seal the loopholes through which tax cheats evade payment of taxes, have failed to act, thereby resulting to constitutional violations and more particularly consumer rights and discrimination,” he said, adding that drinks retailing at less than Sh150 have 80 percent market share.

The trader also wants the Auditor General to audit and submit a report on the effectiveness of the Excisable Goods Management Systems (EGMS) system, which tracks alcohol fixed with tax stamps.

The audit, he said, should entail a physical visit to all the companies to ensure they have EGMS system installed by KRA, flow meters installed on storage tanks, blending tanks and bottling lines as well as dispatch records and excise tax records.

He says many companies have not installed the flow metres at the spirit holding tanks to enable KRA to vet duty payment.

He also wants the court to compel KRA to table in court an updated list of licensed manufacturers of spirits and a list of directors.

He is also seeking a list of all the companies licensed to manufacture alcoholic drinks and installed with EGMS system.

Mr Mombis says KRA published a list of licensed manufacturers and registered importers of alcoholic spirits on December 31, 2018 and the list has never been updated.

He has named KRA, CS Finance and Anti-Counterfeit Authority as respondents in the case.

Justice Weldon Korir directed Mr Mombis to serve them with the court documents within seven days.

In 2019, KRA ordered distillers not to sell alcoholic spirits in 250-millilitre containers at below Sh150, but the Competition Authority of Kenya pointed out that it could breach sections of the antitrust law that bars the setting of binding prices.