The Kenya Revenue Authority has declared that it will not reopen Keroche Breweries again. The taxman argues that Keroche Breweries has blatantly disregarded the agreed payment of tax dues worth Sh. 22.79 billion.
This declaration by KRA has perished any hopes of the factory reopening, days after Keroche Breweries chief executive officer Tabitha pleaded for renegotiation to help the brewery repay its dues.
KRA maintains that the troubled brewer owes it Sh. Sh. 22.79 billion. This figure, says KRA, is the total of unpaid corporate tax, excise duty, VAT and penalties.
According to KRA Commissioner General Githii Mburu, Keroche has failed to pay a cent in duty from beer sales since it reopened in March 2022. He says that Keroche has been aware all along that it would be shut down if it failed to honour the payment plan.
“We also agreed they will remain up to date on current taxes so that when they sell, they will be remitting the dues. When they paid the initial payment and we reopened their facility, we waited for them to honour the payments but that did not happen,” Mburu told a local newspaper.
“The taxpayer did not honour the payment plan agreed upon for the third time…to allow a tax-evading business to continue operating despite it dishonouring all payment plans is to promote a culture of impunity, promote unfairness and allow a few to use public funds to enrich themselves.”
On Monday, Ms. Karanja expressed how much the closure of her business had taken a toll on her. She said that she was struggling to find a way to tell her workers that they would be going home.
“I was thinking aloud and pondering how I will relay the painful message to our employees on Monday that we will be laying them off as a result of KRA’s closure,” she said.
Keroche was shut down last week after failing to honour tax repayment plan with KRA. The agreement Keroche has breached had been agreed at and signed on March 14, 2022. In the agreement, Keroche agreed to pay Sh. 957 million to the tax authority in a period of 24 months starting January 2022.
Initially, Keroche was required to pay Sh. 500 million monthly to offset a Sh. 4.49 billion debt. The Sh. 4.49 billion that Keroche was required to pay out of monthly installments was part of a Sh. 7.54 billion tax demand, which included penalties of Sh. 3 billion.
According to Ms. Karanja, the business is unable to honour the tax repayment plan it entered into with KRA and needs a restructuring of the payment plan. Ms. Karanja says that Keroche had been pressured into the repayment plan which it is now unable to keep up with.
“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,” Ms. Karanja said.
“I therefore also humbly request for further engagement to consider a way for the company to meet its due obligations without sacrificing it and the livelihoods of countless Kenyan households.”
As part of the agreement that the brewer has breached, KRA lifted all the notices it had instituted against Keroche with 36 banks. Agency Notices are commonly issued by KRA to banks holding deposits on behalf of a tax payer and result in the bank freezing such funds. These agency notices had crippled Keroche’s ability to run its operations.