Keroche asks KRA for an 18-month grace period to settle tax arrears
- Keroche Breweries has now applied to the Kenya Revenue Authority (KRA) for an 18-month grace period to settle the back taxes while paying current taxes as they fall due.
- In a statement on Wednesday, the Naivasha-based brewer said it was unable to honor an earlier payment plan due to frequent tax disruptions.
Keroche Breweries has now applied to the Kenya Revenue Authority (KRA) for an 18-month grace period to settle the back taxes while paying current taxes as they fall due.
In a statement on Wednesday, the Naivasha-based brewer said it was unable to honor an earlier payment plan due to frequent tax disruptions.
The brewer has now asked KRA to allow the Naivasha-based factory to reopen to avoid huge losses.
The statement was a response to KRA’s detailed account of the 16-year battle with Keroche, including details of unpaid corporation tax, excise duty, VAT and 3.02 billion shillings penalties .
KRA accuses Keroche of failing to stick to agreed plans to clear tax arrears, including an agreement to pay half a billion shillings a month from December to clear a 4.49 billion shilling debt .
“Our humble appeal to the Commissioner-General: assurance of a certain operating environment free from harassment, unexplained tax demands, punitive taxation introduced on our products leading to their disappearance from the market,” the statement read.
In their plea, the company also asked KRA to lift agency notices from all 36 banks for the company to access funding.
The brewer said the plant had been closed for more than a month, further crippling the already financially struggling business.
Keroche says they have over 2 million liters of beer worth about 512 million shillings in their storage which has a fixed maintenance cost of 30 million shillings per month.
“…if nothing is done within the next seven days, we will be forced to dump all the beer and lay off over 250 direct employees and thousands within our nationwide distribution network,” the company said.
On Tuesday, KRA revealed that Naivasha-based struggling Keroche Breweries owes it 22.79 billion shillings in unpaid taxes, casting a shadow over the brewer’s future.
The tax authorities have portrayed the brewer as a cheat who owes the state more than 22 billion shillings in unpaid taxes.
The finances of Keroche, a private company, are not made public, but it is expected to struggle to raise the billions of shillings if the KRA has its way, putting the brewer’s assets and those of its shareholders at risk.