NAKURU,Kenya, Mar, 4 – Keroche Breweries is considered a Kenyan staple and an employer to thousands across the country. In recent years however, the company has been battling several court cases with the Kenya Revenue Authority (KRA) accusing the brewer of failing to pay its taxes amounting to hundreds of millions of shillings.
Now, one of the quintessential Kenyan brands is on the precipice of collapse after the tax man issued agency notices to at least 36 banks against lending the brewer just weeks after its Naivasha based brewery was shutdown.
According to KRA, the company owes Sh322 million in tax arrears.
The move Keroche CEO Tabitha Karanja says threatens the state of the company and more so the livelihood of thousands of its employees.
Karanja is now seeking president Uhuru Kenyatta’s intervention on the matter saying that efforts to strike an amicable solution with the taxman has proved futile.
“The ground for closure was due to outstanding tax arrears of Sh322 million that accrued from February 2021. Failure to be up to date on the payments was explained to KRA as low business leading to poor cashflows that could not fully meet all the cash obligations of the company (taxes, utilities, salaries, suppliers, etc). We subsequently entered into a proposed payment plan with KRA but we could not manage to honour the same due to frequent interruptions by KRA,”Said Karanja.
The adverse effects of the COVID-19 pandemic affected scores of companies nationwide amidst efforts to resuscitate the economy but he government.
The company further stated that at its peak it has consistently remitted over Sh200 million to the exchequer in a single month.
“We are sure that this issue can be sorted amicably as we are ready to pay the required taxes if KRA opens up our brewery,” she said.
The closure of its Naivasha based brewery is further said to have dented efforts to settle the tax arrears despite efforts to have the factory reopened and a resumption of normal operations.
“We started negotiating for a payment plan and we requested for a 24 monthly installment based on our financial projections which KRA rejected and insisted on six monthly installment.We proceeded with their proposal although we knew it was unrealistic since we wanted to have our plant re-opened and we were desperate to take our products in the market during the festive season,”
The factory was closed on December,7,2021 and reopened for business on December 27 before being shutdown again on January,10,2022.
Keroche says that its had remitted Sh10 million which was available in its account but could not meet the terms of KRA.
“On 15th January 2022, after another round of back and forth discussions, KRA re-opened the plant. For us to go into production we needed revenue stamps which we had to apply and it took a further one week to get approval and issuance from KRA. We therefore started production on 22nd January 2022 and even before these products reached our markets KRA struck again,” she said.
The faculty was again closed on January,31,2022 as Sh2.5 million was remitted as part of efforts to clear the arrears.
Efforts to strike anew deal proved futile with Karanja saying that attempts to conduct negotiations wait the KRA Commissioner General have repeatedly proved futile.
“From 1st February 2022 to date, we have remained closed and yet we have over 2Million litres of beer worth about Sh512 Million in our tanks which have fixed costs to a tune of about Sh30 Million required to maintain the same monthly,”
The company says that it may be forced to fire over 250 direct employees and thousands others operating within its nationwide distribution networks.
“Keroche is capable of remitting over Sh21B every year in tax and a positive consideration of this appeal will be a win for both the company and KRA,” she said.
The company is seeking a grace period of 12 months to clear the arrears.
Observers now say that some of the woes bedeviling the company could be as a result of Karanja’s recent bid to seek the Nakuru senatorial seat.
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