Platinum Distillers sue KRA in a claimed tax evasion battle

Ruiru based alcohol drinks manufacturer Platinum Distillers Limited has moved to court in a bid to force Kenya Revenue Authority to re- open its premises.

In its case filed before High Court judge Weldon Korir, Platinum claimed that although KRA pounced on two lorries carrying goods labeled as ethanol in a bid to evade tax, the consignment was meant for another company neighboring it.

According to Platinum’s director John Waweru, his firm share its compound with other two companies - Multiplan Packaging Limited and Propar Limited.

He claimed in his suit papers that the 4000 litres of Glycol Propylene nabbed in a sting operation conducted by KRA belonged to Multiplan and not his company.

 “In a confounding twist of events, the respondents simultaneously laid siege on the petitioner ostensibly on the mistaken belief that the product belonged to the petitioner.  It appears that he respondents had tracked the delivery of the product belonging to Multiplan believing it to be uncustomed ethanol belonging to the petitioner,” claimed Ndegwa.

It is claimed that the distiller paid Sh383,962, as tax for the consignment allegedly packaged as ethanol.

According to KRA, Platinum ought to have paid up to Sh14 million in taxes.

Preliminary report indicated the consignment was packaged at an ethanol producing company in India, so the company should "We received a tip-off that some ethanol had been brought in as a raw material for making alcohol. We followed two trucks to this factory at the break of dawn and found some workers on night duty," said KRA's head of tax investigations Dr Edward Karanja during the raid.

But the firm produced in court a tax compliance certificate issued by the KRA and ought to lapse on May 9 this year.

According to Platinum, there was no justifiable reason to lock down its premises as it was not the consignee of the goods.

“Despite having this information, KRA has continued to maintain its custom seals on the manufacturing premises of the petitioner effectively denying it access.  The petitioner has employed over 50 permanent workers and is servicing a huge business loan.”

"They did not investigate, instead they  proceeded ebulliently to call media houses to the scene and announce seizure of uncustomed ethanol which they claimed belonged to the petitioner,” argued Platinum’s lawyer Kabugu Muguku.

Lawyer Kabugu asked the court to force KRA to re-open his client’s premises and at the same time have it pay for the losses incurred after the raid.

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Platinum Distillers LimitedKenya Revenue AuthorityKRATax evasion wars