Keroche Breweries bosses to appear in court over KRA tax dispute

By Victor MUJIDU

Top management of Keroche Breweries will today Monday 6 February, appear in court over a pending lawsuit in connection with alleged tax fraud.

Owner and Nakuru County senator, Tabitha Karanja made those revelations on her Twitter handle, claiming that the firm’s officials including the Chief Executive Officer (CEO) and the chairman had been summoned to appear in court to answer to the aforementioned charges.

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According to the March 2022 submissions by the Kenya Revenue Authority (KRA), the alcoholic beverages company is said to owe the tax agency an estimated Sh22.9 billion in tax arrears.

The owner of Keroche Karanja claimed on her Twitter account that she was ready to present facts behind the tax controversy which had seen the business halt operations at least six times – in what has been a frustrating tendency for the brewer.

“We have received a letter from the Director of Public Prosecutions through our lawyer, which the chairman and the chief executive officer of Keroche Breweries are required to appear in court on February 6, for the mention of a pending case over tax. This is very sad since the alleged tax fraud is not true,” reads part of her statement.

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KRA’s tax battles with Keroche took off on March 20, 2022, detailing that the company had significant cases of unpaid corporate tax, excise duty, VAT, and penalties amounting to Sh. 3.02 billion.

The said payment was issued to Keroche July 2021 and January 2022 consecutively but the company fail to undertake the payment obligation.

“Payment plans were agreed with the Keroche with regard to current taxes and the taxes agreed under the ADR process. The first plan agreed upon in July 2021 was not honored, and the second plan agreed upon in December 2021 was also not honored.

Further in January 2022 Keroche, requested a review of the plan, and the same was granted again in writing but still Not Honored,” reads part of the KRA statement.

She further explained that “the alleged tax arises from KRA computations subjecting the 101 million liters of our water used to dilute the 60 million liters of Vodka at a rate of Sh120 per liter amounting to Sh12.1 billion and the resultant Sh 1.9 billion VAT. This amounts to Sh 14 billion, the alleged tax fraud.

CEO Karanja however claimed that the KRA issued Keroche with 329,424,019 excise stamps as a package deal of the Ready To Drink Vodka and said that the taxman collected a 7.3billion excise tax for the 60 million liters of Crescent Vodka consumed during the period.

“Our Viena Ready to Drink Vodka is produced by diluting the 40 percent Vodka, with our naturally distilled water from our source to make it 15 percent. This is similar to the way a customer can walk to a bar, purchase six tots of vodka equal to 188 ml of vodka, and the bartender fetches a 312ml of water from his tap and mixes the two to make 500ml Ready to Drink Vodka.

But unlike the barman, Keroche Breweries would use its 312ml naturally distilled water from our brewery source and use its 21st-century technology to mix uniformly to precision for moderate drinking,” she explained.

Karanja stated last year that KRA was willing to withdraw the case from court and settle the matter.