Alcohol manufacturer London Distillers Kenya (LDK) has been slapped with a Sh332 million tax bill.
The National Assembly’s Finance and Planning Committee heard that the Kenya Revenue Authority (KRA) issued demand notices to the LDK to pay excise duty that it collected from the sale of alcohol waived by Treasury during the regime of retired President Uhuru Kenyatta..
Members of Parliament (MPs) are probing into how the then regime granted Sh620 billion tax waivers to local and multinational companies during Mr Kenyatta’s last term in office.
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 his predecesor’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.
“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.