Tabitha Karanja, the founder and chief executive officer at Keroche Breweries, has been ordered to pay some Sh. 9.1 billion to the Kenya Revenue Authority after losing a case against the taxman.
KRA won six appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017 . In the three appeals before Tax Appeals Tribunal, the contention was in the manufacturing process of Vienna Ice Brand of Vodka.
The brewer argued that, Vienna Ice brand of Vodka was produced by diluting Crescent Vodka, a process that did not amount to manufacturing.
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“KRA relied on the Compounding of Denatured Spirits Act Cap 123 and argued that the process undertaken by Keroche Breweries was compounding within the meaning of the Act,” KRA said in statement.
In the other appeal, on the classification of pineapple-based wines, Keroche had argued that what they produced were fortified wines which should be classified under HS Code 22.04 which attracted lower excise duty rate of 40 per cent.
KRA however said that HS code 22.04 was reserved for wines based on grapes and the Keroche’s fortified wine was purely fermented pineapple and as such, it is to be classified under HS Code 22.06 which is for any other fermented beverage.
In August last year, the Director of Public Prosecutions Noordin Haji ordered the arrest of Keroche Breweries Limited proprietors Tabitha Karanja and Joseph Karanja over allegations of Sh. 14 billion tax fraud.