Platinum Distillers closed over Sh14m tax evasion plot: KRA

Platinum Distillers Limited, an alcoholic drinks manufacturer based in Ruiru, was closed down on Sunday over an alleged plot to evade payment of up to Sh14 million in taxes.

The factory was shut during a sting operation by officers from the Kenya Revenue Authority (KRA). Four people were arrested.

Dr Edward Karanja, the KRA's head of tax investigations, explained that Platinum concealed its imported goods as raw materials for making alcohol in order to pay less in taxes.

He said that whereas the distiller paid Sh383,962, a preliminary report indicated the consignment was packaged at an ethanol producing company in India, so the company should have paid up to Sh14 million in taxes.

"We received a tip-off that some ethanol had been brought in as a raw material for making alcohol. We followed two trucks to this factory at the break of dawn and found some workers on night duty," said Dr Karanja.

ARRESTS

The officers arrested the drivers of the two trucks, the clearing agent and a worker.

They also summoned the company's directors but they did not turn up and are assumed to have gone into hiding.

The declaration sheet accompanying the product noted that it was highly flammable propylebe glycol, exported by Devi Global Exports, an India-based ethanol producer.

DR Karanja said samples were taken for confirmation that it was ethanol.

“We are investigating a case whereby the product was concealed and duties not paid. We want to establish what exactly it is," he said. "If the investigations turn positive, it will be clear that the company tried to evade taxes of Sh14 million by paying only Sh383,962."

He added that the results, expected in a week, would speak to the fitness of the company's products for human consumption.

The distiller located at Infinity Business Park along the Eastern bypass produces Ferrari Ice beer with 10 percent alcohol and spirits including People Vodka and Magic Times, whose alcohol content is 40 percent.

DUE DILIGENCE

Questions have been raised about loopholes that have seen several companies evade payment of millions of shilling in taxes.

Dr Karanja said they launched an investigation into due diligence during importation process and warned that any officer found in the wrong will be dealt with accordingly.

“The importer is responsible for the packaging and labelling of the consignment. Ours is just to ensure the label and the product fit the description,” said the officer.

The Platinum facility is said to be registered for manufacture of excisable products.

AFRICAN SPIRITS

Platinum's case came a few weeks after that of African spirits, a Thika-based alcohol manufacturing plant.

Early in February, African Spirits was found in possession of ethanol of questionable quality and suspected fake KRA stamps following a raid officers from the Flying Squad, the KRA and the DCI.

The company is the producer of Bluemoon vodka, Legend brandy, Glenrock whiskey, Furaha gin, and Furaha Vodka, among others drinks.

As part of the investigation, African Spirits was shut down and police searched for owner Humphrey Kariuki, one of the country’s most reclusive tycoons, on suspicion of evading taxes.

Director of Criminal Investigations George Kinoti further said a manhunt for other senior staff was also launched.