Keroche boss to face Sh14b tax fraud case

Nakuru senator Tabitha Karanja is facing fresh charges amounting to Sh14 billion in tax fraud. The move comes after the Director of Public Prosecutions (DPP) Noordin Haji approved charges against Tabitha, her husband Joseph Karanja and their firm, Keroche Breweries Ltd.

The taxes in question include Sh12.3 billion in Excise Duty and Sh2.1 billion in VAT on various products manufactured and sold by the brewer during the period January 2015 to June 2019.

Haji said in a statement yesterday that having independently reviewed the file and applying the provisions of the National Prosecutions Policy, he is satisfied that there is sufficient evidence to charge Tabitha and her husband.

It is in public interest to charge the suspects with 10 counts of tax fraud, contrary to the Tax Procedures Act, 2015,” wrote Haji. The fresh charges come at a time President William Ruto has declared total war on tax cheats, vowing to ensure that all taxpayers meet their obligations, regardless of their standing in society.

Ruto has accused unnamed personalities of sponsoring the ongoing rallies by Opposition leader Raila Odinga to hit back at his government for going after them in the tax war.

“Even if they sponsor demonstrations so that they don’t pay tax, I want to promise them that they will pay tax. There are no more exemptions. This country is not an animal farm where some are more equal that others, Ruto stated on Monday, referring to George Orwell’s famous novel “Animal Farm.” 

The president’s warning also comes at a time his government stands accused of being behind the dropping of cases facing several high ranking members of his government by the DPP.

According to Haji’s statement, investigations by the Kenya Revenue Authority (KRA) Commissioner General had established that Keroche Breweries Limited had evaded the payment of tax totalling Sh 14. 5 billion.

The taxes were accrued from Excise Duty on Stamps allocated, Sh 329 million, Crescent Vodka, Sh135.4 million, Vienna Ice-Variance quality, Sh 0.8 billion, Vienna Ice, rate variance, Sh9.5 billion and Summit beer, Sh 658.5 million.

Further, the brewer evaded paying VAT for the same products totaling Sh2. 1 billion during the period under review.

The two directors are already in court facing different tax evasion charges having appeared before the Chief Magistrate’s court last year. 

The DPP had not given a nod for the duo to face the charges.

They denied before Milimani the then Chief Magistrate Francis Andayi the charges instigated by the tax collector.

The Karanjas were accused of unlawfully making incorrect statements of their Excise Duty returns between February 2015 and January 2016, which in turn reduced their company’s tax liability by Sh1.8 billion.

Incorrect excise

They also faced a second count of making incorrect excise tax for February 2016 and January 2017, amounting to Sh3.1 billion.

On the third count, they were charged that in February 2017 and January 2018, they presented erroneous Excise duty books with incorrect figures to the tune of Sh3.6 billion.

The charges read that between 2018 and January 2019, another excise tax entry was unlawfully made which exposed the firm to a Sh2.5 billion liability.

Other charges consist of Sh1.9 billion excise tax which was allegedly to be paid between January and June 2019. They were also charged with omitting Value Added Tax (VAT) returns between 2016 and this year.

The court was told that between February 2016 and January 2017, Sh551 million was not remitted by the firm to the tax collector, and that between 2017 and 2018, the amount was Sh613 million.

 They were further charged that between 2018 and January this year, Keroche Breweries owed Sh430 million in VAT and that for the period between February and June this year, the company had not remitted Sh196 million to KRA.

Senior counsel James Orengo, representing the two told the Chief Magistrate that the amount on the charge sheet was disputed. “We plead to the court that you do not get attracted to the figures on this charge sheet. The amount is contested. There is a whole process in computing and demanding money. The amount is speculative,” argued Orengo.

Karanja is out on bond of Sh5 million bond or Sh2 million cash bail, while Tabitha who is the company’s Chief Executive was granted Sh10 million cash bail or Sh15 million bond. Their company was granted Sh15 million cash bail. The company has had long-running battles with KRA, over Sh1.3 billion backdated tax bills, which issued a shutdown order but the brewer obtained a court order stopping the closure.