KRA Shuts Down Keroche Breweries Again in Renewed Tax Dispute

The Kenya Revenue Authority (KRA) has once again shut down Keroche Breweries Limited over tax arrears.

Keroche CEO Tabitha Karanja says the company was shut down on May 15th after reneging on an earlier agreement to repay tax arrears amounting to Sh30 million.

Addressing the press at the factory on Tuesday, Karanja said the taxman went ahead to issue agency notices to several banks against lending the brewer, a move that has fully paralyzed its operations.

"The KRA measures of issuing the agency notices to all the banks in Kenya, have induced a harsh investment climate. Some banks with whom we were arranging financing are finding it difficult because frequent closures are raising risk levels," said Karanja.

She claimed that the company signed the tax repayment agreement under duress and efforts to seek more time to pay the arrears had hit the wall.

Karanja warned that more than 400 workers could be rendered jobless while beer worth over Sh350 million could go to waste if the company remains closed.

“KRA’s draconian measures against Keroche Breweries constitute a hostile exception to well-established government policies of investment promotion, job creation and support for value addition,” Karanja said.

She added: “During the Covid-19 pandemic, the brewery was closed for two years because of the measures enforced to contain the spread of Covid-19 and we incurred tax arrears of Sh322 million.”

She maintained that KRA's move to shutdown Keroche breweries is politically motivated, linking it to her decision to vie for the Nakuru senate seat under the Deputy President William Ruto-led United Democratic Alliance (UDA) party.

"I have called various offices for intervention, and it has been made clear to me that I can only safely exercise my political and democratic rights under the Azimio la umoja coalition and that as matters stand, the adverse action will be sustained," she noted.

Karanja pleaded with KRA to give the brewer a moratorium on the enforcement action that halted their operations and a review of the unsustainable payment plan.

“I plead with the KRA to afford us an opportunity to regain our footing as a manufacturer, employer and a local entity in order to sustainably meet all our obligations” she said.

In March, Keroche and KRA signed a payment plan that would see the brewer settle an undisputed tax amount of Sh957 million over a period of 24 months.