The Kenya Revenue Authority (KRA) has defended the closure of Keroche Breweries over Ksh.351 million in current tax arrears.
In a statement issued on Tuesday, KRA’s Commissioner for Legal Services and Board Coordination suggested the brewer could be holding collected taxes and deploying the funds as working capital for its business.
This is as Keroche Breweries defaults on a payment plan to clear the arrears which touch on taxes collected between January last year and February 2022.
“It is important to note that these are self-assessed tax declared by Keroche Breweries Ltd in its monthly returns but not remitted. It can only mean the Taxpayer may be using taxes collected to fund the company’s operations or for other private purposes,” KRA stated.
Keroche had offered to pay the arrears in instalments of Ksh.20 million from January this year to October, Ksh.30 million in November and Ksh.50 million in December but KRA says it has dishonoured the plan after only paying Ksh.10 million.
“To allow a manufacturer to sell their products without levying correct taxes or to collect taxes without remitting will amount to granting those evading taxes undue advantage over the many law-abiding taxpayers who diligently pay their taxes,” said KRA.
Keroche Breweries Naivasha plant was shut for the third time on January 31 over the payments default.
On its part, Keroche said last week that it had been unable to make the payments due to limited operations owing to past closures while indicating further negotiations with KRA Commissioner General had fallen through.
Keroche warned the permanent closure of its facility would lead to the loss of at least 250 direct jobs.
On Monday, the Kenya Association of Manufacturers (KAM) indicated it had asked Keroche to activate its membership with the lobby to allow it to engage with KRA over the impasse.
Besides current taxes, Keroche owes the taxman Ksh.7.5 billion in taxes from prior years-long tax disputes.
Further the brewer has other pending cases with revenue implications of Ksh.256.4 million and Ksh.14.5 billion respectively.