KRA headquarters Activities at a hotel in the Kilimani area, Nairobi are believed to have influenced a ruling issued the following day where a brewery was allowed to be back in business. Kenya Revenue Authority has appealed a ruling in which Justice Weldon Korir allowed the brewer to be back in business. The taxman says the judge overlooked all the evidence presented.
“The learned Judge W. Korir despite express admissions and lack of denial of liability by the respondent that it was involved in tax evasion and found in possession of 15,000 counterfeit excise duty stamps and goods bearing counterfeit excise duty stamp with revenue implication of Sh2.7 million proceeded to issue conservatory orders requiring the appellant to reinstate the applicant’s excise license, reopen manufacturing premises and issue the respondent with excise duty stamps,” reads part of the appeal.
The appeal says the ruling by the judge disregarded provisions of section 23 of the Excise Duty Act which allows KRA to immediately suspend the license fof a person found in possession of counterfeit stamps and goods bearing counterfeit stamps.
There are claims of corruption to influence the ruling and that Sh20 million was picked by agents.
A complaint is set to be filed at the Judicial Service Commission on the same.
Mr Solomon Wahome Muteithia, Mrs Mary Muthoni Njogu and Caeser Ngige Wanjau are directors with Mount Kenya Breweries limited. There has been an outcry with members of the public raising concern of illicit alcohol in the market with health effects.
The taxman is losing millions in taxes as alcohol distillers continue to use fake excise stamps despite KRA introducing new generation stamps. Companies which don’t cooperate with the cartels are often driven out of the market by unfair competition.
Sources within Mt Kenya Breweries say on Monday, April 26, 2021 the directors of Mt Kenya breweries fled after KRA raided their premises over tax evasion. It is alleged that the management has been evading taxes through smuggling and purchases of ethanol.
Sources say that over 1,000,000 litres of ethanol were smuggled by the company in the past four years to manufacture its products without payment of taxes estimated to be over Sh1billion. The company is also using fake excise stamps to replace the genuine stamps.
Our mole within the company informed us that the directors were willing to spend money to get a favourable judgement instead of paying the government the bill of an amount believed to be nearing a Sh1billion.
Last year, through a Multi-Agency operation, to eradicate illicit alcohol in the Central region it was discovered that it was among the companies that were distributing the illegal brews after members of public complained on alcohol drinks that were dangerous to their health.
It was then that the brewer was shut. But the court-ordered KRA to reinstate a local brewers license and facilitate the resumption of normal operations at the Nanyuki factory. Justice Korir directed KRA to resume the issuance of excise stamps for production and unsealing the manufacturing premises pending the determination of a petition filed by Mount Kenya Breweries Limited.
An order restraining KRA from continuing to lock the outer doors or in any way deny or limit access to the brewers manufacturing premises was granted.
“To execute its mandate, KRAs officers are however at liberty to gain access and exit from the brewers manufacturing at any given time,” Justice Korir said.
KRA will have to release to Mount Kenya Breweries motor vehicle registration number KCC 433H seized from its manufacturing premises.
Mount Kenya Breweries are licensed to engage in the manufacture, packaging and distribution of alcoholic beverages.
In April, KRA without any notice or prior information entered its premises and conducted a search after which they claimed to have discovered 16,600 bottles of its product purportedly affixed with unverified excise stamps.
Korir said KRA is not protecting the interests of the public which is to ensure that taxes are collected.
“When KRA proceeds to kill businesses in the guise of collecting taxes, it becomes an undertaker and will eventually die since its survival depends on the existence of income-generating businesses in which it can collect taxes,” he said.
KRA’s actions were triggered when the brewer was found using counterfeit stamps and excisable goods and was also in possession of goods bearing counterfeit stamps. ENDS