The Kenya Revenue Authority (KRA) has agreed to meet with company representatives to resolve the impasse issue with Keroche Breweries.
The Keroche Chief Executive Officer, Tabitha Karanja, during an interview with a local TV station yesterday evening stated that KRA Commissioner-General Githii Mburu had contacted the company to set up the meeting, which is intended to assist resolve a tax dispute that has been simmering for months.
“They have called us for a meeting and I really appreciate the commissioner-general. So, we will have a meeting Thursday and we just hope this thing will bring everything to a rest,” Karanja said.
While Karanja had been in contact with Mburu regarding the tax dispute, matters intensified in December when KRA began shutting down Keroche’s operations.
“(At the) meeting, I believe, we will agree and see how we will open our plant. They can save the 250 jobs and the beer that is in the tanks,” Karanja said.
KRA had earlier refuted claims by Keroche Breweries that the taxman had crippled the company in the guise of collecting taxes.
Through a statement, the taxman denied the claims accusing the businesswoman of unfair competition and dishonesty.
“By allowing any taxpayer to continue collecting taxes and not remitting the same, KRA will not be executing her mandate of ensuring that taxes that fall due are remitted in a timely manner and that all taxpayers remit their fair share of taxes,” read a statement.
The tax collector said it would not go for a shilling more and or a shilling less from the brewer.
Not dealing with the matter would distort the market and end up killing tax paying business at the expense of those that do not remit taxes, the statement read.
“In the end, no taxes will be paid and employment will be lost when the tax paying businesses close down due to unfair competition from those not paying taxes,” said the statement.
According to KRA, Keroche has reneged on all payment plans despite acknowledging the debt.
In July 2021, Keroche agreed it owed a total of Sh272,211,842 comprising Sh134,447,847 in principal taxes and Sh137,763, 995 in interest and penalties.
“The brewer offered to pay the principal taxes of Sh134,447,847 in nine monthly instalments starting from September 25, 2021, a payment plan KRA says was not honoured,” stated the taxman.
In another plan, the brewer proposed to pay Sh500 million in 24 equal instalments starting December 2021 but failed to comply, according to the taxman.
“In the two agreements, Keroche Breweries was to apply for remission of penalties and interests upon full settlement of the outstanding principal tax liability.
Keroche Breweries Ltd has not honoured the payment of instalments as per the agreements,” KRA said.
KRA said to allow a manufacturer to sell their products without levying correct taxes or to collect taxes without remitting amounts to granting those evading taxes undue advantage over the many law-abiding tax payers who diligently pay their taxes.
Keroche boss had asked the taxman for a grace period to clear the tax obligation, saying the Covid-19 pandemic had adversely affected its revenue flows.
The Naivasha-based breweries said the taxman closed the firm and warned 36 banks against giving it loans due to Sh322 million tax arrears tussle putting the firm in a tight corner as it struggles to replenish its coffers that went dry as the Covid-19 pandemic struck.
Keroche had earlier petitioned President Uhuru Kenyatta to intervene in the re-opening of the company and be given a grace period of 12 months to settle the arrears.
“Keroche is capable of remitting over Sh21 billion every year in tax and a positive consideration of this appeal will be a win for the company and KRA,” Karanja said.
Further, the Kenya Association of Manufacturers (KAM) called on Keroche Breweries to activate their membership to allow them to assist in their ongoing tax case.
Through a statement, KAM CEO Phyllis Wakiaga said they would engage the KRA on the issue with a view to seeking a mutually agreeable solution to the impasse that saves jobs and ensures all due taxes are settled.
“From the meeting, it was agreed that Keroche Breweries will activate their membership and submit the details and documentation of the issues raised, to enable KAM to engage KRA on the same,” it said in a statement.
Kenya Private Sector Alliance (Kepsa) also admitted in a tweet that it was “engaging KRA on this matter” and “acknowledges and appreciates the contribution of Keroche to the Kenyan economy.”
