KRA shuts down Keroche Breweries in renewed tax dispute

Tuesday, June 14th, 2022 17:24 | By
Keroche CEO Tabitha Karanja
Keroche CEO Tabitha Karanja addressing journalists in Naivasha. PHOTO/Courtesy

The Kenya Revenue Authority (KRA) has shut down Keroche Breweries for reneging on the tax agreement on the settlement of tax arrears.

Speaking in Naivasha on Tuesday, June 14, 2022, Keroche CEO Tabitha Karanja revealed that the brewery was shut down by KRA in May, rendering over 400 workers jobless.

In March this year, Keroche and KRA signed a payment plan that would see Keroche settle an undisputed tax amount of Ksh957 million over a period of 24 months starting from January 2022.

Ms Karanja said that KRA is demanding a total of Ksh322 million from the company. She pleaded with the taxman to give them more time and restructure the payment plan, terming the current payment plan as unsustainable.

“I still plead with the KRA to afford us an opportunity to get back on our feet and regain our footing as a manufacturer, employer and local indigenous business entity in order to sustainably meet all our obligations. I specifically request once more to be given a moratorium on the enforcement action that shut down our operations, and on the unsustainable payment plan that we agreed to under unbearable pressure,” Karanja said.

Keroche Breweries CEO Tabitha Karanja gestures during a Media briefing Yesterday. PHOTO/Philip Kamakya

According to Ms Karanja, beer worth at least Ksh350 million could go to waste if the brewer is not reopened in time to recover the losses.

“I plead with you, in the name of all the hundreds of innocent Kenyans whose livelihoods depend, directly and indirectly on this brewery, to allow us to reopen and resume full operations in order to keep them working and to enable us to meet our obligations to them and to the KRA. If we do not do this, hundreds of families will be reduced to poverty, suffering and begging in these extremely difficult economic times,” she said.

Keroche-KRA tax tussle

KRA and Keroche have been in a 16-year long tax dispute resonating around the classification of the brewer’s products, leading to two agreements between the two parties, in July and December 2021.

By the second agreement of December 21, 2021, a tax of Ksh7.54 billion was agreed to be owing and payable. The brewer, however, stated earlier it only owes KRA Ksh322 million in arrears plus Ksh500 million it had defaulted paying in 24 monthly installments.

This is the second time the factory is being shut by the taxman this year due to tax disputes, the first one being in February 2022.

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