NAIROBI, Kenya, Mar 11 – Keroche Breweries has been ordered to pay the Kenya Revenue Authority Sh9 billion by the tax tribunal after losing six lengthy disputes filed between 2015 to 2017.
In three of the Appeals, the contention was the manufacturing process of Vienna Ice Brand of Vodka.
The brewer argued that Vienna Ice brand of Vodka was not a distinct product from Crescent Vodka since Vienna Vodka was produced by diluting Crescent Vodka a process that did not amount to manufacturing.
In the other three appeals, the contention was regarding classification of pineapple-based wines.
KRA relied on the Compounding of Denatured Spirits Act Cap 123 and argued that the process undertaken by Keroche Breweries was compounding within the meaning of the Act.
“Keroche Breweries Limited was involved in the compounding of spirit which amounts to manufacture within the meaning in Excise Duty Act, 2015 and Customs and Excise Act, CAP 472 (repealed)as such Vienna Ice was a distinct product for which Excise Duty was payable,” the tax tribunal said in its judgment.
KRA, however, did not escape unscathed.
The Tribunal faulted the Authority for levying interest and late payment penalties for the period the disputes were being litigated at the High Court and the Court of Appeal which had directed that the matters be heard at the Tax Appeals Tribunal.
Last year, the director of public prosecutions ordered for the arrests of the company’s directors Tabitha Karanja and Joseph Karanja in connection to allegations of evading taxes.