The bigger irony here is that the product is actually produced
locally then exported to the neighboring countries of Tanzania, Uganda and the
Democratic Republic (DRC) where it is then smuggled back into the country
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| Commissioner General KRA, James Mburu |
The government is losing billions of shillings annually in
un-paid taxes due to massive smuggling of ethanol to feed the hungry markets that
is involved in distilling and production of alcoholic spirits.The bigger irony here is that the product is actually produced
locally then exported to the neighboring countries of Tanzania, Uganda and the
Democratic Republic (DRC) where it is then smuggled back into the country.
Ethanol attracts less tax when exported as opposed to selling the product
locally through legal means.
Emerging queries are whether local cartels operatives collude
with their colleagues in the neighboring countries to have the commodity
smuggled back to Kenya where demand is high? Ethanol is a by-product of sugar
production processed from molasses.
It has since emerged that some Kenya Revenue Authority (KRA),
the Kenya Police, Immigration, and other law enforcement agencies’ officers
have been compromised to facilitate the thriving of the trade and cheat the
government of taxes. A source at the directorate of Criminal Investigations Department
(DCI) confirmed to The Weekly Vision online that investigations into the racket
are at an advanced stage.
A senior DCI officer who declined to be named said: “Since
the raid on African Distillers factory in Thika, we have been relentless and that
is why you heard about the confrontation that occurred between our officers that
were being prevented from conducting a search into this racket by our other
colleagues manning a road-block on the Namanga – Nairobi.”He said he could not reveal more details about their
on-going operations since the revelation could compromise our people because
the people involved are wealthy people who may do anything to protect their
turf.
According to KRA, previously there were 177 spirits
distilling factories but they were whacked down to 26 – which brings in the question
how many went underground and operating illegally.Investigations by this writer established that most of the
officially licensed distilling companies have official import permits from the
KRA to import ethanol which is the backbone of their products through official
KRA national borders exit and entry points.
Those we talked to confirmed that their imports are clearly
displayed as ethanol for which tax is paid at the Kenya – Tanzania border
points depending on the quantities involved charged per tonne before proceeding
to the distilleries for processing – transported in special trucks.
A leading distiller who requested not to be named because of
the sensitivity of the matter said: “Some of us are doing legal imports to
produce our alcoholic spirit products, but despite the high demand we are
facing stiff competition in the market from the black market.” The distiller
said that the demand for the spirits was always sky rocketing because of the
high retail prices charged on beers per bottle
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