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Court asks Keroche to pay Sh100m in tax war

Keroche Breweries
Keroche Breweries CEO Tabitha Karanja. FILE PHOTO | NMG 

The court has directed Keroche Breweries to pay the Kenya Revenue Authority (KRA) Sh100 million as a condition for stopping the taxman from attaching its accounts over a Sh9.1 billion tax dispute.

Justices William Ouko, Daniel Musinga and Patrick Kiage further directed the Naivasha based brewer on Thursday to pay the amount within 45 days, failure to which the order would lapse and the KRA would be free to raid its accounts.

"Pending the hearing and determination of the applicant's intended appeal, the agency notices issued on Equity Bank Limited and Absa Bank of Kenya, Plc, on March 11, 2020, and any other agency notice that may have been issued on any of the applicant's bankers and debtors be and are hereby lifted," said the judges.

They said after considering all the relevant factors, including the challenging economic circumstances the Covid-19 pandemic "has put the country and indeed the entire world under", they were inclined to grant a conditional stay of execution.

The company rushed to the Court of Appeal after a High Court judge directed it to pay the KRA Sh500 million as a condition for stopping the taxman from attaching its accounts

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Justice David Majanja rejected attempts by the company to argue that it was unable to raise the amount, because of the closure of bars and restaurants.

The judges directed the main appeal to be filed within 30 days.

Through CEO Tabitha Karanja, Keroche said the appeal might be rendered useless if the agency notices issued by the KRA to its bankers are not lifted. She further said the notices would ground the operations of the company to a halt.

The KRA opposed the case, saying the company had not demonstrated how the judge erred in dismissing the application for review.

The taxman further said although bars and restaurants were not fully operational, sale of alcohol was still ongoing in supermarkets, mini markets and through home deliveries.

The taxman added that Keroche ought to have approached it with a repayment plan as opposed to re-litigating the same issue.

The company is contesting a Sh9.1 billion tax demand. It has accused the taxman of reclassification of its products and backdating of uncollected taxes, in a bid to squeeze more from the brewer.

At the heart of Keroche's troubles is one of its most popular products, Viena Ice Vodka, which the KRA wants to be taken off the list of fortified wine products.

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