Why KRA is in hot soup amidst claims that Keroche Breweries evaded tax amounting to Kshs. 14 Billion

KTN News Aug 22,2019


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The public prosecutor has ordered the arrest of Keroche Breweries Limited proprietors Tabitha Muigai and Joseph Karanja over allegations of Sh14 billion tax fraud.

The two are directors at the company and could face ten counts of tax evasion.

Director of Public Prosecutions (DPP) Noordin Haji said Kenya Revenue Authority (KRA) Commissioner-General Githii Mburu 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.

The inquiry relates to the alleged failure to pay tax on various products manufactured and sold by the company from January 2015 to June 2019.

The DPP noted that investigations revealed that the company evaded paying Sh12.34 billion Value Added Tax (VAT), Sh329.4 million for stamps and Sh135.4 million for Crescent Vodka among other products.
Rate variance

The forfeited payments on products include Vienna Ice- Quantity Variance Sh1.7 billion, Vienna Ice- Rate Variance Sh9 billion, and summit beers at Sh658 million, Mr Haji said.

In terms of Excise duty, the DPP claimed Keroche owes the taxman Sh41 million in stamps, Sh55 million on Crescent Vodka, Sh233 million on Vienna Ice with quantity variance and Sh1.5 billion with rate variance.
Summit beers are also short on monies worth Sh250 million, according to Haji.

Keroche is also accused of evading payment of excise duty amounting to Sh2.1 billion for the same items.
The DPP said he is satisfied that there is sufficient evidence and that it is in the public interest to charge the suspects with 10 counts of tax fraud contrary to the Tax Procedures Act of 2015.

“Therefore, having independently reviewed the file and applying the provision of the National Prosecution policy, I am satisfied that there is sufficient evidence and that it is in the public interest to charge the suspects,” he stated. “Accordingly, I direct that the directors be arraigned in court.”