Punish Keroche for reneging on deal, KRA tells court

Senator Tabitha Karanja inspects beer production at Keroche Breweries in Naivasha. [Antony Gitonga, Standard]

Seeing as it could not begin operations immediately, Keroche Breweries Limited did not remit Sh8 million to the Kenya Revenue Authority within seven days of reopening, as ordered by the court in July.

The brewer based in Naivasha, Nakuru County, said it chose to prioritise salary payments to allow employees to return to work and facilitate the production and distribution of their products.

Keroche is embroiled in a tax dispute with KRA over the company's failure to pay a disputed Sh22.79 billion tax bill and duty.

The taxman shut down the brewer's operations in an attempt to force it to pay the tax arrears.

According to KRA, Keroche was required to pay Sh8 million on August 6 and another Sh8 million on August 30, as well as current taxes totaling Sh14.2 million.

Keroche's failure to resume operations as soon as it reopened on July 29 made it difficult for the brewer to begin making payments, according to a letter dated August 19, 2022, and addressed to KRA's Commissioner of Legal Services and Board Coordination Paul Matuku.

KRA filed a petition in a Nairobi court last week seeking to imprison Keroche CEO Tabitha Karanja and director Joseph Muigai Karanja for allegedly disobeying a court order on tax payment.

"Keroche Breweries Limited has been adamant in disregarding the court order of July 14, 2022. Yet the order was issued in the presence and with the knowledge and understanding of Keroche's counsel. The order was not and has not been complied with to date," reads KRA's application.

The taxman claims it again wrote to Keroche on July 21, August 3, August 15, and August 24 over the matter.

According to a letter by Mr Nicholas Kechir, Keroche's acting Chief Operating Officer, the brewer could not resume production immediately due to challenges in acquiring diesel and other fuels.

Kechir said that while they were able to procure raw materials and other utilities for the resumption of operations, procurement of diesel and heavy fuel oil for generators and boilers was delayed due to the elections.

He said the company remains committed to making monthly payments for current taxes.

KRA wants the court to find the CEO and director guilty of contempt and commit them to civil jail. 

“The court should order the two to each pay a fine of Sh1 million for every month they have been in default of the July 14, 2022 orders,” reads KRA's application.

The application, marked as urgent, will be heard on Tuesday.