London Distillers hit with Sh332m tax bill

London Distillers Company Ltd Chairman Mohan Galot (Right) and Managing Director Avin Galot before the Departmental Committee on Finance and National Planning at Parliament Building Nairobi on August 2, 2023. PHOTO | DENNIS ONSONGO | NMG  

By EDWIN MUTAI More by this Author

The Kenya Revenue Authority has hit alcohol manufacturer London Distillers Kenya (LDK) with a Sh332 million tax bill that the Treasury had waived during the regime of retired President Uhuru Kenyatta.

The National Assembly’s Finance and Planning Committee heard that the taxman issued demand notices to the LDK to pay excise duty that it collected from the sale of alcohol.

The MPs are inquiring into how the then regime granted Sh620 billion tax waivers to local and multinational companies during Mr Kenyatta's last term in office.

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Mohan Galot, the LDK chairman, told MPs that the demand follows a revocation of approval of a tax abandonment granted to it by former Treasury Cabinet Secretary Ukur Yatani on January 20, 2022.

Mr Galot tabled a letter dated March 31, 2023, from the Treasury Cabinet Secretary Njuguna Ndung’u revoking Mr Yatani’s tax waiver.

In revoking the excise tax waiver to LDK, Prof Ndung’u said the approval for abandonment of the Sh445 million tax was against the recommendation of the KRA boss.

“In this respect, the Cabinet Secretary, National Treasury and Economic Planning hereby revokes the approval of tax abandonment to London Distillers Kenya Limited of January 20, 2022,” Prof Ndung’u said.

Mr Galot told the committee that despite the LDK paying Sh80 million being 20 percent of the principal amount (Sh445 million), the KRA is demanding the balance of Sh332 million that had been waived.

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“We have already paid Sh95 million but the KRA is demanding full payment. Despite LDK having a Sh1.5 billion bank overdraft and having closed our factory, the KRA is on our necks,” Mr Galot said.

“We appeal to you to help us because we applied for the tax waiver and we were granted. 

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