MP seeks probe into 10 alcohol firms linked to tax evasion

Friday, May 22nd, 2020 00:00 |
Ruaraka MP Tom Kajwang at a past event. Photo/PD/FILE

Mutuku Mwangangi

Parliament has cast the spotlight on 10 alcohol manufacturers believed to be involved in tax evasion and counterfeiting of Kenya Bureau of Standards (Kebs) stamps.

The companies are said to have imported over 200 million 250mm empty bottles from Oman and Tanzania in the last 12 months and separately obtained bottle tops from Torrents East African Limited in order to avoid paying excise duty paid on bottle tops.

The revelations came out in a statement sought by Ruaraka MP Tom Kajwang, who asked for a directive from the Speaker for the departmental committee on Finance and National Planning to undertake an inquiry into the matter and report their findings to the House.

Seek report

According to the Hansard record of May 6, 2020 seen by People Daily, the companies imported the bottles from Pragati Galss Gulf and Nizwa Industrial Estate in Oman and Kioo Limited in Dar-es-Salaam. 

The said bottles were allegedly cleared duty free into the country. The bottles were subsequently refilled with liquor of various brands, sealed with fake Kebs stickers and sold to unsuspecting customers. 

Firms allegedly involved are Zheng Hong, Patiala Distillers, Hill Kenya Limited, Mount Kenya Breweries, Saiwan Enterprises, Vine Park FRM, Platinum Distillers, Moonwalk Investments Limited, Tihan Limited and Two Cousins Distillers, Kajwang told Parliament.

“The brands manufactured and packaged by those companies with fake Kebs stickers and excise stamps are invariably low-cost products with very high percentage alcoholic content and are sold mainly to low-income earners, mostly youths.

Whereas the bottle tops generally fall under the excise duty tax regime, bottles do not, thus making it possible for fraudulent manufacturers to evade paying tax on bottles,” he said in his statement before the house.

Kajwang said tax evasion, counterfeiting and refilling were common practice in the said companies and sought a report on the total tax paid by the same firms between January 2019 and March 2020.

Deputy Speaker Moses Cheboi, directed that the committee conducts investigations and the relevant Cabinet Secretary be invited to shed light on the matter.

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