Sh300bn lost in unpaid alcohol taxes

Kenya: The economy loses more than Sh300 billion annually in unpaid taxes from alcohol, the National Authority for the Campaign against Alcohol and Drug Abuse (Nacada) has said.

The authority said unregistered alcoholic beverage manufacturers do not pay stamp duty, value added tax and income tax to the exchequer, adding that the sector has the potential of remitting more than Sh1 trillion annually.

Launching a campaign against counterfeit alcoholic drinks in Narok County yesterday, Nacada Chairman John Mututho said there were more than 900 factories manufacturing alcoholic beverages without licences.

“The Government loses more than Sh300 billion in unpaid taxes annually from most manufactures. It collects only 30 per cent from manufactures that are in the tax bracket.

“The sector is riddled with corruption, and it is sad that manufacturers pay hefty amounts of money to tax officials to evade taxes,” he said.

He said since the crackdown on the purveyors of illicit drinks started early this month, the authority has identified only 150 factories that produce some brands of alcohol.

Mututho directed all alcoholic drinks outlets to submit their business permits, proprietors PIN/tax registration, liquor licenses and public health certificates to their respective county commissioners by Wednesday this week for profiling.

The anti-alcohol agency boss noted that 60 per cent of all alcoholic drinks outlets in the country sell fake or adulterated products to unsuspecting buyers.

EFFORTS HAMPERED

He added that the authority’s efforts to nab illicit brewers were being hampered by conflict of interests among law enforcement agencies, including Nacada.

“Most bars and wines and spirits outlets are owned by policemen and my officers. This has made the crackdown hard. We are going to take action against them because of the conflict of interests,” he said.

In the 2014/2015 financial year, Mututho said a huge amount of money will be allocated to the rehabilitation of alcohol and drug addicts, adding that Sh300 million will be earmarked for enforcement and another Sh3 million for reviewing and harmonising alcoholic and beverages laws. He directed county commissioners and police to close bars and nightclubs operating in residential areas and near learning institutions.