Keroche vs KRA: The Kenya Revenue Authority is set to seize the assets belonging to Keroche Breweries. This is after Keroche failed to honour the court deadline to pay Sh. 500 million to the taxman.
A court order had required Keroche Breweries which is owned by Tabitha Karanja to pay the amount within 30 days. This was after Keroche went to court to block KRA from seizing her assets. On Wednesday, March 11 2020, KRA had won a tax dispute against Keroche, and gotten the go ahead to demand Sh. 9.1 billion from Keroche’s Tabitha Karanja.
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.
KRA to pay you Sh. 500,000 if you report tax cheats
The brewer argued that, Vienna Ice brand of Vodka was produced by diluting Crescent Vodka, a process that did not amount to manufacturing.
“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. KRA vs Keroche.
According to the KRA Tax Investigations Handbook, the KRA Commissioner is empowered to hold as security an asset such as land or a building owned by a taxpayer who has defaulted in payment of tax. “This is done through placing caveats on subject properties and other assets owned by taxpayers and beneficiaries,” says the handbook.
In the same vein, a related report that appeared in a local daily says that KRA’s Investigations & Enforcement department has another unit dubbed Asset Recovery & Evidence Analysis which is expected to spring into action in case Keroche does not settle the tax bill. Keroche vs KRA.