KRA

The Kenya Revenue Authority (KRA) has been ordered to reopen 25 alcohol manufacturers shut down under President Uhuru Kenyatta’s anti-counterfeit and tax evasion campaigns.

According to sources present at a meeting between the alcohol industry lobby and President William Ruto’s administration, the taxman was directed to reopen the manufacturer’s premises including billionaire Humphrey Kariuki’s Africa Spirits Limited.

KRA shut down Mr Kariuki’s Africa Spirits Limited, manufacturers of a popular low-end brandy called Legend which was at the time the bestselling brandy in the country.

The taxman charged Mr. Kariuki for tax evasion amounting to Kes17 billion but lost the case at the High Court on technicalities of the powers of KRA to review and prosecute tax evasion. KRA has filed a notice to appeal.

Like Mr. Kariuki several alcohol manufacturers were shut down during the five-year purge by the multiagency team led by KRA along Anti-Counterfeit Agency, Kenya Bureau of Standards (Kebs), the Immigration Department, the Office of the Attorney-General, the Office of the Director of Public Prosecutions, Inspector-General of Police, Financial Reporting Centre (FRC), National Intelligence Service, among others.

The team appointed by former President Uhuru Kenyatta is partly responsible for the increase in the taxman’s collections.

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For instance, during the first three quarters of the financial year, 2021/2022 (July to March) KRA jointly seized goods worth Kes1.8 billion with the third quarter alone registering recoveries worth Kes570.7 million.

The team has however come under criticism for strong-handed tactics including shutting down companies, especially of influential businessmen that were unfriendly to the regime.

Besides Mr. Kariuki, Mrs. Tabitha Karanja of Keroche Industries has also faced several shutdowns over Sh9.1 billion in back taxes.

Keroche was not among the 25 listed manufacturers set to be reopened including Moonwalk Investment, Mount Kenya Breweries, Vinepack Limited, and Top Rank Breweries.

President William Ruto’s administration has sought to unwind some of President Kenyatta’s policies including the KRA’s hard-handed tactics that saw several businesses shut down for tax evasion.

During President Kenyatta’s regime, KRA was also able to push through policies to increase taxes on inflation and implementation of product monitoring technology on manufacturer premises.

KRA’s tactics have seen the industry lobby push back in courts where the Pubs Entertainment and Restaurant Association of Kenya (Perak) have accused the taxman of contempt of court.

The manufacturers now have a friendly government that wants to reform the taxman.

Deputy President Rigathi Gachagua says President William Ruto’s administration will not close down businesses over tax disputes with KRA. 

He said the decision to shut down Humphrey Kariuki’s Africa Spirits Limited was a foolish decision that will never be allowed to happen again.

“That factory was paying about Kes50 million in terms of tax every month. They sent DCI there, policemen, shut it down, arrested Humphrey Kariuki, a very enterprising Kenyan, a very honorable man, a man who was toiled through his life and built,” Mr Gachagua stated.

“African Distillers factory owned by Humphrey Kariuki was closed and it was paying Kes50 million every month in terms of tax and for three years we have lost Kes1.8 billion, money that we need in this country. That was a foolish decision and that will never happen in this administration,” he added.

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