Keroche Breweries reopens after row with KRA

After two weeks of finger-pointing and blame games, Kenya Revenue Authority (KRA), and Keroche Breweries have resolved their differences and operations at the Naivasha based company have resumed.

Under the agreement, the brewer has been given 24 months to pay the Ksh 957m tax arrears that it owes the tax collector starting with Ksh 21m goodwill.

This came as the company workers embarked on the process of repackaging and selling liquor worth over Ksh 500m that is currently in their tanks.

For the last two weeks, the two institutions engaged each other in blame games with Keroche crying foul while seeking a one-year grace period to repay the arrears.

On its part, KRA had accused the brewer of collecting excise tax worth over Ksh 279m from its beer sales and failing to remit it.

But after a public outcry and boardroom negotiations, the two parties have resolved their differences paving way for full production.

According to Keroche CEO Tabitha Karanja, operations in the factory had kicked off as KRA moved in to remove the seals placed in their production line.

While lauding the move to reopen the brewery, Karanja said that KRA had relaxed its demands while the company was ready to abide by the new agreement.

“We are back to full production after three months of closure and we shall pay Ksh 21m as goodwill. We shall repay the balance of the tax arrears as we pay the monthly taxes,” she said.

Karanja added that since the dispute started in December leading to several closures of the brewery, they had lost between Ksh 600m-Ksh 700m.

“KRA has also lifted the agency notice issued to 36 banks blocking us from accessing any funding as part of the payment agreement we came up with,” she said.

She challenged Parliament and the Senate to come up with laws that support and cushion local investors.

“The only way we can support local industries is coming up with laws that are friendly and empower the CS Treasury to issue grace periods to pay taxes and waiver among others,” she said.

Two weeks ago, the company was closed down sending home over 250 with the CEO attributing their financial crisis to Covid-19 which saw the company operations paralyzed at the height of the pandemic.

In their appeal to the President, Karanja requested for the reopening of the factory and to KRA to give them a grace period of twelve months on the tax arrears.

“Keroche is capable of remitting over Ksh 21B every year in tax and a positive consideration of this appeal will be a win for both the company and KRA,” she said.

On its part, KRA said it took the action after the company failed to send it the principal tax, even after the brewer itself admitted to having collected the money in its monthly self-assessment report.

“It can only mean that the taxpayer (Keroche) may be using taxes collected to fund the company’s operations or for other private purposes,” said the taxman in a statement.