Court Orders Keroche to Pay KRA Ksh9 Billion In Tax Arrears

The Kenya Revenue Authority (KRA) has been allowed by the courts to collect Ksh9 billion from Keroche Breweries.

In the case filed before Tax Appeals Tribunal, KRA was demanding taxes for the Vienna Ice Brand of Vodka, which Keroche argued that was not manufactured, but made by diluting the Crescent Vodka.

KRA argued that the process amounted to compounding of denatured spirits act cap 123.

“Compounding of spirits also amounted to manufacture of new product within the definition of customs and excise act, cap 472 now repealed,” argued KRA.

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Keroche Breweries Limited proprietors Tabitha Karanja and Joseph Karanja were arrested and charged with Ksh14 billion tax fraud.

The Director of Public Prosecutions Noordin Haji noted that investigations revealed that the company evaded paying Ksh12.34 billion Value Added Tax (VAT), Ksh329.4 million for stamps and Ksh135.4 million for Crescent Vodka among other products.

Tabitha accused the taxman of selective and unfair targeting, arguing that she has always followed the law and was shocked to be accused of tax evasion when the matters were still under a tax tribunal.

Tabitha Karanja and husband Joseph Karanja founded Keroche Breweries in 1997.

Initially making a fortified wine, the company has since moved into spirits and, from 2008, making beer. The business is said to have a 20 per cent.

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