Director of London Distillers Kenya Limited Mr Mohan Galot was arraigned in court on tax evasion charges totalling KShs. 2,131,418,706.
Mr. Galot appeared before Milimani Chief Magistrate Martha Mutuku charged alongside London Distillers Kenya Limited with 18 counts of tax evasion related offences.
He was charged after a series of investigations which revealed that the Company had grossly under-declared production volumes of excisable products, omitting sales in the Value Added Tax (VAT) returns as well as failure to declare incomes in the Income Tax returns as stipulated in the tax laws.
The court heard that the accused failed to declare VAT sales worth KShs. 3,528,392,928 with a VAT tax implication of KShs. 563,542,869 for the years 2015, 2016, 2017 and 2019. Failure to declare such sales in the VAT return is an offence contrary to the VAT Act No. 35 of 2013.
The accused are further charged with failure to declare production volumes of 168,157 litres of ready to drink beverage and 8,048,268 litres of spirit in 2016, 2017 and 2019 as stipulated in the Excise Duty Act No. 23 of 2015. This, according to the court papers, led to a revenue loss of KShs. 1,510,083,228 in excise duty.
The accused are further facing additional counts of failure to declare KShs. 189,308,698 in the income tax returns for 2016 and 2017 as stipulated in the Income Tax Act Cap 470. Consequently, the court heard that the accused failed to pay income taxes totalling KShs. 56,792,609 for the two years.
The accused denied all the 18 counts before court and were released on a KShs.5 Million bond and a surety of a similar amount. In the alternative, each accused has been ordered to deposit a cash bail of KShs. 1 Million.
If convicted, the accused shall be liable to a fine not exceeding Kshs. 10Million or double the taxes evaded in addition to payment of taxes evaded and late payment interest.
The matter is set for mention on 9th August, 2021 for pre- trial directions.