KRA Accuses Keroche Of Dishonesty In Tax Row

The Kenya Revenue Authority (KRA) has come out to blame Keroche Breweries Limited for its failure to honour payment agreements involving billions of shillings in acrued taxes.

KRA on Tuesday said the Naivasha-based brewer has consistently failed to honour agreements reached between the two parties leading to the closure of its premises since February 1, 2022.

According to the taxman, KBL has been consistently collecting excise duty taxes levied on its alcoholic beverages without remitting it to the authority.

At the centre of the 15-years dispute is the Kshs. 351 million KRA says the brewer owes and which KBL says amounts to Kshs. 322 million contradicting the authority’s figure which led to closure of its premises.

“On the issue relating to Kshs. 351 million taxes due and prominently highlighted by Keroche Breweries Ltd as being the main reason that led to the recent closure of the premises, it is imperative to note that this is principal tax which Keroche withheld for the period January 2021 to date and has not remitted the same to KRA. This means that Keroche Breweries Ltd has been collecting Excise Duty Tax and VAT from its consumers through the sale of its products but has not been remitting the taxes to KRA,” said KRA.

KRA says, by December 14, 2021, this amount stood at Kshs. 279.96 million which Keroche offered to pay in instalments of Kshs. 20 million beginning January until October 2022.

Subsequntly, the brewer also agreed to pay another Kshs. 30 million in November and 49.96 million in December to clear the tax arrears.

Howevever, KRA says Keroche only paid Kshs. 10 million and dishonoured the agreement.

On her part, KBL Chief Executive Officer Tabitha Karanja on her official Twitter handle blamed KRA for frequent closure of its bremises in a bid to recover pending taxes.

“On 22^nd December 2021 KRA re-opened, but unfortunately, the earliest our products could reach the market was on 27^th December 2021. We only managed to sell for three days till the end of the year but KRA were on our case demanding for the arrears according to the payment plan. We remitted Kshs. 10 Million which was available in our accounts then, which to them was insufficient,” said Tabitha.

KRA now accuses KBL of mischief in honouring the tax obligations which the firm assessed and declared on its own in its monthly returns but but did not remitt.

“It can only mean that the Taxpayer may be using taxes collected to fund the company’s operations or for other private purposes,” said KRA.

The authority further accuses the brewer of not honouring payment plans agreed with the Keroche on current taxes and the taxes agreed under the Alternative Dispute Resolution process.

KRA adds, “The first plan agreed in July 2021 was not honoured, the second plan agreed on in December 2021 was also not honoured. Further in January 2022 Keroche requested for a review of the plan and the same was granted again in writing but still Not Honoured.”

Following push and pull involving courts, ADR and Tax Appeals Tribunal, KRA and KBL had agreed in December last year on a Ksh. 7.5 billion tax owing and payable, comprising principal tax of Kshs. 4.5 billion, penalty of Ksh. 66.9 million and interest of Kshs. 2.98 billion.

Keroche Breweries has since applied to the National Treasury seeking abandonment of taxes amounting to Kshs. 3.9 billion.