Keroche Misses KRA Deadline to Pay Sh500m as Ordered By Court

Keroche Breweries Limited is yet again in the lime light for failure to pay Kenya Revenue Authority (KRA) Sh500 million, as directed by the court.

The brewer had been ordered to pay the amount within 30 days, which has since lapsed without depositing the money, leaving Keroche at risk of losing its assets to the taxman.

In the petition filed on Wednesday, April 15, Keroche CEO Tabitha Karanja wants the Sh500 million reviewed, adding that the effects of the coronavirus pandemic including the closure of bars and night clubs have hurt its sales.

“This is, however, not possible at the moment since the appellant (Keroche) is already heavily indebted on account of overdraft facilities and numerous bank loans from Absa Bank Kenya Plc, which it is required to service through monthly installments of Sh57,000,000,” she said.

“The appellant has carefully examined its financial books and it is clear that it is not in a position to pay the respondent (KRA) Sh500 million,” she added.

The court will hear Keroche’s petition on Monday, offering the brewer a three-day reprieve.

On March 16, Justice David Majanja had ordered Keroche to pay KRA Sh500 million as a condition to stop the taxman from recovering Sh9.1 billion from the brewer saying that if the brewer failed to pay the amount in 30 days, an order stopping KRA from recovering the amount by attaching Keroche’s accounts would lapse.

This came after the Naivasha-based brewer Keroche secured an order barring KRA from seizing its bank accounts and protection from forcible transfer of cash from the lenders to the taxman.

The KRA had ordered five top banks to transfer cash in Keroche’s bank accounts to the agency’s coffers, grounding the brewer’s operations.

The taxman had hinged its aggressive action on the Tax Procedures Act, which empowers it to seek taxes directly from third parties like banks, employers and suppliers as well as seize and auction property to recover unpaid tax.

The Act also gives the KRA powers to freeze tax cheats’ property transactions and ultimately auction the assets to recover the unpaid tax.

The company is contesting a tax demand for Sh9.1 billion and has accused the KRA of reclassifying its products, backdating uncollected taxes and changing the formula, all in a bid to squeeze more from them.