WHY KEROCHE BREWERIES WAS SHUT DOWN-KRA SPILLS BEANS ON TAX DISPUTE

The Kenya Revenue Authority has issued a breakdown of its tax dispute with Keroche Breweries which has accused the taxman of closing down operations.⁣
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KRA said that while taxpayers’ information is private and confidential, the agency had to issue a clarification on what was ailing the alcohol manufacturer.⁣
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“The taxpayer may also on his/her own volition put such information to the public. Where a taxpayer chooses to do so, then KRA is left with no choice but to clarify any information provided by a taxpayer to the public which in the view of KRA is not correct and may misleading,” read part of the statement.⁣
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KRA and Keroche’s disputes date back to 2006 when KRA demanded dues such as Excise Tax of Sh467,704,167, VAT of Sh388,594,657, corporation Tax and withholding tax of Sh737,333,959.⁣
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What followed is a series of litigation procedures and after reaching an agreement, Keroche’s dues were upheld by the Tax Appeal Tribunal.⁣
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Keroche did not agree with the assessments and appealed but the TAT upheld KRAs tax demands. In the intervening period, KRA and Keroche had entered into negotiations to resolve the Tax Cases amicably.⁣
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An agreement was reached on August 14, 2018. Keroche failed and refused to sign the agreement forcing the matter to proceed for a full hearing before the tribunal.⁣
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KRA commenced enforcement action against Keroche on March 11, 2020. They moved to High Court on March 16, 2020 challenging the enforcement action taken by KRA.⁣
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The Tribunal also released another judgment with regard to another set of appeals, filed in 2015 and 2017 over a dispute regarding applicable excise rates to Keroche’s Vienna Ice Brand of Vodka from the year 2012.⁣
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Keroche was required to pay another Sh7.9 billion in taxes, pushing the total amount to Sh9.1 billion.⁣
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The High Court gave Keroche Breweries Ltd a reprieve against the enforcement measures by KRA by granting it stay orders on the condition that Keroche Breweries Ltd pays KRA security for tax of Sh500 million.⁣