KRA invites Keroche management for talks on Sh22.7bn tax row

Kenya Revenue Authority (KRA) has invited troubled Naivasha-based Keroche Breweries’ owners for talks amid the standoff over a Sh22.79 billion tax bill.

Keroche chief executive and co-founder Tabitha Karanja, confirmed the meeting in interview with the Business Daily.

"Yes, they have invited us," she told the Business Daily.

The meeting is expected to chart the way forward amid the raging tax dispute, she added.

Keroche has requested the KRA to grant it a grace period of 18 months to clear taxes in arrears while paying the current ones as they fall due.

It has also appealed to the KRA to allow the reopening of the plant-based in Naivasha to prevent huge losses and lift the agency notices with the 36 banks, which demanded lenders wire cash from the Keroche accounts to the taxman’s bankers.

Keroche said it has over two million litres of beer worth about Sh512 million in its storage with 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 earlier.

The brewer earlier on Wednesday said it was unable to honour an earlier payment plan due to frequent disruptions from the taxman.

The statement was a response to the 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 of 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 part of tax arrears amounting to Sh4.49 billion.

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

The taxman also imposed a freeze barring 36 banks from dealing with the 25-year-old family-owned brewer famous for its Summit Lager and Summit Malt beers.