Ten Kenyan Distillers Under Probe for Tax Evasion

At least 10 local distillers are subject to a probe by the Kenya Revenue Authority (KRA) over Sh3.9 billion in tax evasion cases. This was disclosed in a report submitted to the Kenyan national assembly.

The KRA document submitted last week by the Finance and National Planning Committee reveals that Zheng Hong (K) Ltd, Patiala Distillers (K) Ltd, London Distillers, Al-garve Distillers, Crystal World, Vinepack Limited, Crywan Enterprises Ltd, FRM EA Packers Ltd, Tihan and Vivek Investments Ltd. involved in tax evasion.

The inquiry covering January 2019 to March this year emerged as KRA completed investigations that saw directors of Platinum Distillers Ltd and Two Cousins Distillers Ltd charged in court for avoiding tax worth Sh845 million.

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The KRA document also reveals that with Two Cousins Distillers Ltd in trouble for unaccountable stamps and unreported output worth Sh366 million, Platinum Distillers Ltd had Sh479 million in undeclared volumes of stamp use for ethanol.

“Regarding the companies under query, the Authority has identified various non-compliance issues through tax returns review, investigations, audits and enforcement and has taken appropriate interventions including tax recovery measures and prosecution,” the KRA document stated.

This comes as the KRA endeavours to seal tax evasion loopholes as well as cast its net wide to raise at least Sh1.62 trillion as projected by the National Treasury to finance the Sh2.79 trillion budget for the 2020/21 financial year.

The target is a 14 per cent drop compared to the Sh1.88 trillion in 2019/20 financial year. The government is already faced with a challenge of meeting its revenue target as Covid-19 pandemic bites.

The KRA document was filed following the investigation of Ruaraka MP Tom Kajwang on tax evasion and the repackaging of alcoholic drinks by a number of companies.