KRA, Keroche should iron out tax dispute amicably


Keroche factory in Naivasha. FILE

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, honour the agreement and clear the unpaid dues.

It is dishonest for the troubled Naivasha-based brewer to claim it inked an earlier deal under duress and therefore wants to walk away from the agreement.

The brewer is taking a wrong path and must seek peace with the KRA in a deal that must see it pay taxes like other firms struggling to remain afloat.

Therefore, the brewer has a responsibility to pay part of the agreed tax arrears to show its commitment in meeting obligations required of an ethical firm.

Keroche has breached similar agreements in the past, triggering aggression from the KRA.

But the taxman has a duty 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 closure 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.

The brewer has the responsibility to honour its part of the deal and must not hide under the shield of politics now that its co-founder opted to join politics and bid for Nakuru’s senate seat.

Therefore, there is a need for the parties to drop the grandstanding and reach a deal.