NAIROBI, Kenya, June 14 -Local brewer, Keroche breweries has asked the Kenya Revenue Authority (KRA) for a moratorium to settle the Sh 322 million tax arrears noting that the taxman in May shut down the Naivasha-based brewer despite initial agreements.
The firm’s Chief Executive Officer Tabitha Karanja, in a statement, said that on May 15, the taxman took enforcement action and shut down the brewery rendering 10,400 employees jobless and making life more difficult for several farmers who are now unable to sell their produce to the firm.
“After negotiating with a large team of your commissioners and top officers, we were compelled to enter an agreement whose implementation could not be supported by the company’s performance. Our pleas for time to resume payment on attaining full operational performance were rejected, but the KRA promised that we would walk the recovery journey together,” Karanja said.
“Unfortunately, KRA took enforcement action on May 15 2022, without any prior notice, and closed down the brewery,” she said in a statement seen by Capital FM.
In March, the brewer was shut down over accrued tax arrears but later Keroche asked for an 18-month grace period to resume operations noting its willingness to go back to the table with KRA to come up with a more realistic payment plan.
It was later reopened and was issued 24 months to pay tax arrears starting with a sh 21 million goodwill.
But it is now appealing for the Government to give it more time to get back on its feet as a manufacturer, employer, and business entity in order to meet its obligations.
“KRA’s draconian measures against Keroche Breweries Limited fail to take due account of the difficult times our economy is undergoing, which places many jobs and livelihoods under serious threat. KRA’s deliberate actions also fail to recognize the difficulty employers have undergone due to the disruptions occasioned by the Covid-19 pandemic, as well as the severe strain that manufacturers’ business ecosystems have suffered,” Keroche says in a statement.
Among its concerns is that the feud with KRA has destroyed its distribution network and raised its risk levels with many banks who are now hesitant of financing its operations.
“The KRA measures of issuing the agency notices to all the banks in Kenya, have induced a harsh investment climate. Some banks with whom we were arranging financing are finding it difficulty because frequent closures are raising risk levels. Our distribution network, which was broken by Covid-19, has been made much harder to repair,” Karanja said.
“Our distribution network, which was broken by Covid-19, has been made much harder to repair,” she decried.
