Sh9b tax dispute should not bring Keroche Breweries to its knees
By The Standard | March 13th 2020
The Tax Appeals Tribunal’s order that Keroche Breweries Limited should pay the taxman more than Sh9 billion is, without doubt, music to the ears of the Treasury mandarins.
For a cash-starved government that has embarked on painful cost-cutting measures to keep its vital programmes going, the prospects of a Sh9 billion boost is appetising. The amount would help plug part of Kenya’s huge budget deficit.
Keroche has a responsibility to give Caesar what belongs to Caesar. So if the brewer owes the taxman the said Sh9 billion, it has a responsibility to pay the money.
Every business and Kenyan must pay taxes. That is the price we must pay for being Kenyan to keep the wheel of our great nation turning in the right direction.
Of course Keroche has disputed that it owes KRA Sh9 billion and has vowed to take the battle to High Court and higher up until the case is ruled in its favour. That is within its right.
Notably, the tribunal’s ruling comes months after Keroche CEO Tabitha Karanja and Chairman Joseph Karanja were charged with tax evasion and other related charges.
But although KRA is justified to go for Keroche’s jugular to demand what it believes the firm owes Kenyans, this should be done in a manner that does not endanger the company’s existence.
Experts have already warned that the huge cash demand could send the only surviving indigenous brewer hurtling down the precipice.
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If that happens, hundreds of workers employed by the firm would, inevitably, lose their livelihoods. Their families would suffer too.
This would be a big blow to the economy at a time when joblessness has increased due to the harsh economic environment owing to slow growth of key job-creating sectors and downtime. Many companies have sent some of their workers packing too.
The Naivasha-based brewer also buys raw materials from farmers and its closure would bring suffering to all those on the value chain, including transporters, traders and farmers. In addition, KRA would also lose a key taxpayer.
No, it would not be in the interest of the taxman or any Kenyan to kill the goose that lays the golden eggs.
That is why if perchance it is ultimately established the company owes KRA the huge amount of money, all measures must be taken to ensure that the debt doesn’t run it aground. The best thing is to allow the company to pay the amount gradually.
That will ensure that the company continues with its operations and the Kenyans who rely on it, keep their jobs.
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