Keroche fights back, to appeal court’s decision in tax war

Alcohol manufacturing giant Keroche Breweries Limited is locked in a war with the Kenya Revenue Authority (KRA).

In the latest twist, Keroche’s CEO Tabitha Karanja (pictured) now says that the ruling by the Tax Appeals Tribunal yesterday holds no water as KRA did not present any new evidence during the arbitration process.

She accused KRA of filing the same letters they used 14 years ago in the case already quashed by court.

“The tax appeals tribunal failed to abide by the guidelines on new evidence and this is why we are appealing the decision to the high court,” read part of the statement by Tabitha.

Vienna Ice Brand of Vodka

Karanja has also questioned KRA’s attempt to tax the water used to dilute the Vienna Ice Brand of Vodka saying it is at the same rate as the vodka.

“Our dispute with the KRA is on the confusion of the correct applicable rate of the Viena Ice Vodka drink.”

According to Karanja, the drink only contains 15 per cent alcohol content and is mixed to precision to reduce Kenyans intake of liquor. “The computation done by KRA is punitive, unacceptable and amounts to daylight robbing of Kenyans.”

She added that the taxman has no right to collect taxes from the manufacturer for what they have never charged the public for. “Whatever we charged the public- the 188ml vodka- we have religiously remitted as applicable tax for the last 12 years.”

In three questions directed to KRA’s Commissioner-General James Mburu, Karanja posed:

“In six months, your organization has made unexplainable and unrealistic demands that have now totaled Sh23m.”

“Why are you destroying the manufacturing agenda that you claim is part of our economic pillars and does this country only favor foreign investors?”

Earlier today, KRA froze Keroche Breweries bank accounts to recover the Sh9 billion after the brewer lost six appeals before a tax tribunal yesterday.

The KRA is set to collect Sh9.1 billion in taxes from Keroche Breweries Limited with regard to products manufactured and marketed by the company. This follows a win by the KRA in six appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017, respectively.

However, in a rejoinder, Karanja said she would be moving to the High Court to appeal the tribunal’s decision.

Arrests

Last year in August, the Director of Public Prosecutions Noordin Haji ordered the arrest of Keroche proprietors Tabitha Karanja and her husband Joseph Karanja over allegations of Sh14 billion tax fraud.

Haji said KRA’s Commissioner-General Mburu had submitted an inquiry file to his office on August 18 and an audit which established that Keroche had evaded tax totalling Sh14, 451, 836, 375.