Keroche to KRA: Give us 18 months to clear tax arrears

Keroche Breweries has now appealed to the Kenya Revenue Authority (KRA) to grant it a grace period of 18 months to clear taxes arrears while paying the current taxes as they fall due.

In a statement on Wednesday, the Naivasha-based brewer said they have been unable to honour an earlier payment plan due to frequent disruptions from the taxman.

The brewer has now requested KRA to allow the reopening of the plant based in Naivasha to prevent huge losses.

The statement was in response to KRA’s blow-by-blow account of the 16-year-long battle with Keroche, including details of unpaid corporate tax, excise duty, VAT and penalties amounting to Sh3.02 billion.

The KRA accuses Keroche of defaulting on agreed plans to clear the tax arrears, including a deal to pay half a billion shillings monthly from December to clear a Sh4.49 billion debt.

"Our humble appeal to the Commissioner-General:  Assurance of a certain operating environment free from any harassment, unexplained tax demands, punitive taxation introduced on our products leading to their being wiped out of the market,” read the statement.

Lift agency notices

In its plea, the company has also asked KRA to lift the agency notices with 36 banks blocking the firm from accessing financing.

The brewer said the Naivasha-based plant has been closed for over a month, which has further crippled the business which is already in financial distress.

Keroche says they have over 2 million litres of beer worth about Sh512 million in their storage which has a fixed maintenance cost of Sh30 million per month. 

“… if nothing is done in the next seven days, we will be forced to drain down all the beer and lay down over 250 direct employees and thousands within our nationwide distribution network,” the company said.

Painted as a cheat

On Tuesday, KRA disclosed that the troubled brewer owes it Sh22.79 billion in unpaid taxes.

The taxman has painted the brewer as a cheat who owes the State over Sh22 billion in unpaid taxes.

The finances of Keroche, a private company, are not publicly available but it is expected to struggle to raise the billions of shillings if KRA has its way, placing the brewer’s assets and those of its shareholders at risk.