Keroche’s plea to be exempted from a tax evasion case, is hitting a near dead end with KRA claiming that the brewer owes KShs. 22.79 billion in unpaid taxes.
The brewer had announced a possible lay-off of over 250 employees due to the pressure of paying KRA the taxes due. KRA however decried that Keroche had been given so much time, over 16 years to pay the taxes due, a journey which led to an alternative dispute resolution (ADR) negotiation which is yet to be met.
The taxman gave a detailed breakdown of the case negotiations with Keroche Breweries, adding that Keroche has so far collected taxes amounting to KShs.279.9 million but failed to remit the same.
Keroche revealed to KRA that it had collected money as principal tax amounting to KShs. 279.9 million as per its monthly self-assessment report. The amount was in form of excise duty and 16 per cent value added tax (VAT), paid by consumers through Keroche’s product sales.
“It can only mean that the taxpayer (Keroche) may be using taxes collected to fund the company’s operations or for other private purposes,” KRA said in a statement.
Keroche – KRA tax dispute goes back 16 years, and has passed through legal confines including Tax Appeals Tribunal, High Court, Court of Appeal and the Alternative Dispute Resolution (ADR). The battle includes many details of tax evasion as well as unpaid corporate tax, excise duty, VAT and penalties of KShs. 3.02 billion.
Despite being offered a platform to negotiate payment of taxes accrued in the dispute through ADR, Keroche sought President Uhuru Kenyatta’s intervention through the press. Ms Karanja, sought the President’s intervention adding that he could not access KRA Commissioner General Githii Mburu.
Keroche Breweries came into being in 1997 and has been competing well in the industry, in the same field as East Africa Breweries Limited (EABL).
“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 ‘not a shilling more and not a shilling less’,” KRA stated.
Despite political connections, Keroche is required to pay taxes through avenues provided for by law or through platforms such as ADR, which KRA had discussed with the brewer. Products exposed to the Kenyan market without paying due taxes have leverage over other competitors, they pose unfair competition and that should not be the case. The taxman is in a position where it is being pushed to grant undue advantage to a taxpayer, which is not a good example to other law-abiding taxpayers who comply by paying their taxes as required.