Raila's Spectre faces closure for non-compliance of excise tax rules

Opposition leader Raila Odinga’s Spectre International is once again among the tens of companies staring at closure for non-compliance with excise tax rules, putting thousands of jobs on the line.

Keroche Breweries and tobacco firm Mastermind are the other top-tier firms that would have to cease operations in the newest purge by the Kenya Revenue Authority (KRA).

This is after the KRA issued a public notice on the updated list of licensed manufactures and registered importers of excisable goods for the year 2015. The list contains companies licensed to manufacture or import excisable alcoholic and non-alcoholic goods and beverages.

Spectre International based in Kisumu manufactures and markets spirits — the base for production of alcoholic beverages.

The company, which also missed out in the previous list describes itself on its website as the manufacturer of quality Extra Neutral Spirit, Neutral Spirits, Industrial Methylated Spirits and Coloured Methylated Spirits produced from sugarcane molasses to be used in the beverage, pharmaceutical and personal care industries.

According to the taxman, any manufacturer or importer not on the updated list is not authorised to manufacture, import or sell excisable goods.

Other firms missing in the list which includes 133 importers and 165 local manufacturers are Keroche owned water making firm Nero and micro-brewery Ozzbeco, which brews Sierra Premium beer.

“At KRA, we have remained lenient and provided a platform for facilitation for all manufacturers and importers of excisable goods and we are now set to undertake the applicable enforcement actions to ensure full compliance,” said KRA Domestic Taxes Commissioner, Alice Owuor.

“All wholesalers, retailers and other outlets including consumers are reminded to purchase or offer for sale excisable goods from the duly licensed manufacturers and registered importers only,” she said, warning that KRA will commence a nationwide crackdown against manufacturers and importers of unlicensed excisable goods.

This is an updated list of an earlier one released on August 18, 2015. A total of 71 importers who had not complied in the August 18 list have since complied. Fifty-one more local manufacturers have also since complied.

Softa Bottling Company and Mumias, that were missing from the previous list have since complied.

Retailers have been warned against stocking products sourced from unlicensed manufacturers and unregistered importers of excisable goods. Ms Owuor said stern action will be taken against retailers found to be stocking products sourced from unlicensed manufacturers and unregistered importers of excisable goods.

Such licensing applies to manufacturers and importers of beer, wine, bottled water, carbonated soft drinks (soda), juices, other non-alcoholic beverages and plastic bags. Manufacturers and importers dealing in cosmetics, polythene paper bags, ethyl alcohol, spirits and spirituous beverages, and tobacco are also subject to the licence.

Keroche Chief Executive Tabitha Karanja could not be reached as her phone went unanswered. However, in the August 18 list, Mrs Karanja condemned KRA’s closure notice, claiming that a suit challenging the tax claim had been filed in court and was yet to be determined.

“It is very clear to us that the sole purpose of KRA’s public notice is to confuse the market and force the closure of Keroche Breweries and ultimately put it out of business,” Mrs Karanja said then in a statement.

Karanja took issue with the manner in which the taxman issued the notice, which she described as “a brazen contravention and contempt of a court order dated July 22, 2015,” and which they have in their possession.

According to Karanja, the order stopped them (KRA) from executing their demands and allowed Keroche Breweries to continue conducting its business.

“KRA, therefore, has no authority to de-list Keroche Breweries from the list of licensed excise manufacturers in 2015 until the full hearing and determination of that case,” she stated.