No reprieve for Keroche as KRA challenges reopening orders

Keroche Breweries Naivasha full operations resume kra tabitha karanja

A staffer of Keroche Breweries in Naivasha when full operations resumed on March 16, 2022. 

Photo credit: Macharia Mwangi | Nation Media Group

Alcoholic beverages manufacturer Keroche Breweries may not yet resume operations after the Kenya Revenue Authority (KRA) moved to court to block its operations.

The KRA on Tuesday filed a suit in the Nairobi High Court challenging orders issued by another court last week that allowed the Naivasha-based brewer to resume operations.

"The [KRA] has on July 19 moved to the High Court to challenge orders issued last week” allowing Keroche to reopen, read a statement from the agency.

The KRA wants the court to set aside the orders and bar Keroche's reopening.

The agency argues that the case filed in the lower court by Keroche and the orders issued were contrary to previous directives issued by the same court and the consent agreements reached and signed by the two parties.

Last week, more than 400 Keroche workers breathed a sigh of relief after a Nairobi court ordered the reopening of the company pending the hearing and determination of a case it had filed.

The employees were staring at imminent job losses after the factory was closed over a tax dispute with the KRA.

Keroche managers temporarily sent them home pending the court case.

Last week, Keroche Managing Director Tabitha Karanja admitted that the company had incurred huge losses as the plant lay idle but expressed optimism that a turnaround was in the offing.

In a matter heard by video link, High Court Judge Alfred Mabeya of the Milimani Commercial Division directed the KRA and its officers, associates and agencies to "unseal the packaging line and stores". 

The court also directed the KRA to reactivate the Exercisable Goods Management Systems (EGMS) and allow the company to start operating.

The court ordered that Keroche pay the KRA Sh8 million as a first instalment to settle its tax arrears and remit the same amount on the 30th day after the first payment until the hearing date.

The court also directed that the company continue meeting its tax obligations without fail.

The case was slated for mention on September 22.

The tax standoff between the two sides over accrued tax arrears of over one year saw the company’s operations shut down, exposing over 400 workers and thousands in its distribution network to job losses.

Earlier this year, Ms Karanja broke her silence and publicly complained that the KRA was harassing the company. She warned that the brewer was on the verge of losing at least Sh500 million in stock and 250 employees.

Her cries sparked public fury, with the taxman again accused of frustrating local businesses.

On March 9, Ms Karanja accused the KRA of frustrating negotiations by shutting down the brewer on three occasions between December 7, 2021 and January 28 and issuing agency notices to banks.

She said the KRA was in a war against local enterprises.

Ms Karanja said the bulk of tax disputes constituted claims on products the KRA had approved and classified in a particular tax tariff about two decades ago, only to later reclassify them in a higher category and demand taxes for products already sold.