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Tabitha Karanja: This is not the fall of Keroche Breweries

Breweries CEO Tabitha Karanja during an interview with The Standard in Naivasha, Nakuru County on January 6, 2022. [Joseph Kipsang, Standard]

Keroche Breweries Chief Executive Officer Tabitha Karanja is optimistic that her tussle with KRA over unpaid taxes would end soon.

Her remarks come a day after she sent a press statement warning that 250 jobs were at stake if her run-in with the taxman over Sh322 million tax arrears continues without intervention.

She urged President Uhuru Kenyatta to implore upon KRA to give her more time to offset the debt.

“We are urging the President to kindly, but urgently request the re-opening of our plant to prevent huge losses and enable us to resume production, sales and distribution, and most importantly protect and safeguard the livelihoods of thousands of Kenyans employed by the company, both directly and indirectly,” she said in her Thursday statement.

Keroche says the Sh322 million tax arrears date back to February 2021.

Both KRA and Keroche had agreed to have the balance settled within six months, starting July 2021. The two had appeared before a tax appeal tribunal.

“We wanted to pay the arrears in installments across 24 months. We knew we would not fulfill their (KRA’s) demands [to have the debt settled within six months], but we accepted because we wanted to open [business],” Tabitha Karanja said when she was hosted on KTN News Business Today show on Friday, March 4.

She said in December 2021, the Naivasha-based company opened for three days, but KRA wanted Sh50 million in taxes.

“On December 22, 2021 KRA re-opened, but unfortunately, the earliest our products could reach the market was on December 27, 2021. We only managed to sell for three days till the end of the year, but KRA was on our case demanding the arrears according to the payment plan. We remitted Sh10 million which was available in our accounts then, which to them was insufficient,” the company said in its Thursday statement.

Tabitha Karanja says the taxman knows Keroche’s struggles, but “chooses to ignore reality” in their quest to recoup the Sh322 million.

“KRA were stationed here [at Keroche Breweries]. So, they already know how many units of beer we sold. They have the machine that records the number of bottles produced [at the beer plant],” she claimed in the KTN News interview with Aby Agina.

“Maintaining a brewery for two years, with bars closed and the curfew imposed, is... [not easy]. There’s a lot of money that goes into keeping the business alive.

“That explains why our revenue dipped. The only option for us, was to go to the banks, but when they wrote the letters [stopping banks from engaging us], we could not be able to access credit.

“We pleaded with KRA to lift the agency notices from the banks, but they said unless we clear [the arrears].”

Keroche has now warned of looming job losses if it fails to bounce back to business in the next seven days.

“If nothing is done in the next seven days, we’ll be forced to empty the two million litres of beer [worth Sh512 million]. The Kenya Power would demand their pay, and maybe Keroche would not have the funds. Then the employees, the 250 of them, would want their December, January and February salaries,” said Tabitha Karanja.

“It’s a bad position to be in. You can see a bit of malice. Why would the KRA issue agency notices to 36 banks, while Keroche has accounts with only three banks: Absa, Equity and Family?

“We are going to fight until the firm is opened. We have done so much for this country. We have paid over Sh30 billion to the exchequer,” she claimed.

Asked whether this marks the fall of the beer-maker, Tabitha said: “No, this can’t be the fall of Keroche. We have come from far, very far. It’s just a stand-off that we believe will be unlocked by His Excellency the President.

“We are appealing to Parliament to give the Cabinet Secretary for Treasury powers to veto the revenue collector should there be a dispute between KRA and a company. That would allow the minister to look at companies’ cases individually. Some [companies] would benefit from waivers, others moratoriums, whatever [the relief measure],” she said.

“It’s ridiculous to imagine that Keroche can fall because of Sh300 million [tax arrears],” emphasised the businesswoman.

Karanja urged President Kenyatta to listen to her cry, saying: “Why would you talk of wanting to create more jobs while shutting [down] others, just because of Sh300 million?”

She played down the role of her political affiliation to her current woes. Karanja is eyeing the Nakuru senatorial seat on a United Democratic Alliance (UDA) Party ticket in the August 9, 2022 General Election. UDA is linked to Deputy President William Ruto, who has since fallen out of favour with President Uhuru Kenyatta.

“The business competition wars are there regardless of one’s political affiliation. Keroche is the biggest Kenyan-founded company in this country. In its full operation, it can remit over Sh21 billion to the Kenyan economy,” claimed Karanja.