Keroche must make it a duty to pay taxes as a responsible corporate citizen, and it remains in the brewer’s interest to reach a deal and clear the unpaid dues.
The KRA has a responsibility to create a conducive environment that allows businesses to thrive.
In recent years, the taxman has adopted an aggressive stance that looks set to be counterproductive, particularly the closure of businesses over unpaid taxes.
As the battle between Keroche Breweries and Kenya Revenue Authority (KRA) rages over taxes, it is critical that the parties return to the negotiation table.
Keroche must make it a duty to pay taxes as a responsible corporate citizen, and it remains in the brewer’s interest to reach a deal and clear the unpaid dues.
The KRA has a responsibility to create a conducive environment that allows businesses to thrive.
In recent years, the taxman has adopted an aggressive stance that looks set to be counterproductive, particularly the closure of businesses over unpaid taxes.
The taxman shut operations of Naivasha-based beer maker Keroche, leaving hundreds of jobs hanging in the balance.
The shutdown does not benefit any party in an economy where corporates have put a freeze on hiring, hurting the fight against the growing youth unemployment.
The closure of Keroche also stands to hurt the KRA in two ways. First, it would put paid to its efforts to recover the Sh22 billion the brewer owes the taxman
Then, it eliminates the opportunity to earn future taxes from Keroche, and would ultimately make it difficult for the authority to meet targets if the action were to be applied on multiple companies.
Therefore, there is need for the parties to drop the grandstanding and reach a deal.
It is encouraging that Keroche has now requested the KRA to grant it a grace period of 18 months to clear arrears while paying the current taxes as they fall due.
The KRA should give this offer a shot, albeit with watertight conditions, including a deal that will see a portion of funds flow to the taxman’s account once it gets to Keroche’s bankers. We are aware that Keroche has breached similar agreements in the past, triggering aggression from the KRA.
The brewer has the responsibility to honour its part of the deal and follow the advice of the court from the 16-year-old battle with the KRA
The judges have observed in their rulings, payment of taxes is a must if we are to live in an orderly society and enjoy government services.
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Note: The results are not exact but very close to the actual.
