The KRA says that Keroche’s cash flow statement tabled in court, which indicated that the brewer was operating in losses, cannot be verified unless audited accounts are brought to court.
The Kenya Revenue Authority (KRA) has questioned Keroche Breweries' financial statements that show the family-owned firm cannot afford to pay Sh500 million.
The KRA says that Keroche’s cash flow statement tabled in court, which indicated that the brewer was operating in losses, cannot be verified unless audited accounts are brought to court.
Ms Veronicah Mburu, the relationship manager at domestic taxes, said the draft extracts of the financial statement of two months tabled by the company were not an accurate and candid disclosure of the current financial position of the company and can be verified through audited accounts.
“Further, it is not clear which documents those are since they are not cash flow statements, neither are they income and expenditure statements,” she said. Keroche chief Tabitha Karanja had argued that the company cannot raise the Sh500 million stating that the business was cash-intensive and its operational costs for January alone was Sh300,913,612, compared to revenue collected of Sh231,617,460.
She added that in February, the cost of operation was Sh214.5 million while revenue collected was Sh203.6 million.
The company wants the Court of Appeal to stop KRA from attaching its accounts over a Sh9.1 billion tax dispute. The firm got temporary orders stopping the taxman from attaching its accounts on condition that it pay Sh500 million, pending appeal. The firm filed another appeal saying it cannot raise the amount. The KRA further said it had granted the company an olive branch, towards payment of part of the taxes, including entering an alternative dispute agreement or a payment proposal but the brewer reneged.
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