The director of London Distillers Kenya Ltd, Mr Mohan Galot, has been charged in a Nairobi court with evading tax totalling over Sh2 billion.
The prosecution stated that the distiller and its director devised a scheme of evading taxes, including excise duty on locally manufactured spirits, VAT and corporate taxes.
According to the charges, the company was involved in a scheme of gross underreporting of production and sales volumes and also purchase of packaging materials through associated companies.
It is alleged that the distiller purchased 272,989,752 bottles but the finished product volumes omitted some 7,941,539 litres with an equivalent excise duty of Sh1.4 billion.
Among the charges is that he omitted from excise duty, returns for the years 2016 and 2017 for litres of ready, locally manufactured spirits.
The tycoon was accused of failure to declare production volumes of 168,157 litres of ready-to-drink beverage and 8,048,268 litres of spirit in 2016, 2017 and 2019 as stipulated in the Excise Duty Act. This, according to the charge sheet, led to a revenue loss of Sh1.5 billion in excise duty.
He was further accused of failure to declare Sh189 million in the income tax returns for 2016 and 2017 as stipulated in the Income Tax Act. Consequently, the court heard that the accused failed to pay income taxes totalling to Sh56.7 million for the two years.
Mr Galot denied a total of 18 counts of omitting from tax returns production volumes and sales amounts, which ought to have been included, contrary to sections of Tax Procedures Act, and failure to pay taxes of Sh1.4 billion.
The prosecution alleges that between January 2016 and December 2018, the company activated some 1,610,150 stamps in the EGMS system, which represented a production equivalent to 527,250 litres. But the taxpayer declared and paid taxes on only 359,162 litres, hence evading tax.
In 2017, the company allegedly failed to pay taxes amounting to Sh226 million, while the following year, it failed to pay tax amounting to Sh814 million.
Mr Galot denied all the charges and Chief Magistrate Martha Mutuku ordered him to deposit Sh1 million cash bail to secure his release.