The Kenya Revenue Authority(KRA) has defended its actions against Keroche Breweries Ltd saying the alcohol manufacturer has consistently failed to remit taxes and also failed to honour its agreed payment plans.
According to KRA, Keroche has been collecting taxes from consumers but not remitting the same to KRA, it disclosed that Naivasha-based Keroche Breweries owes it ksh 22.79 billion in unpaid taxes.
In July 2021, Keroche agreed it owed a total of ksh 272 million comprising of ksh 134 million in principal taxes and ksh 137 million in interest and penalties. The brewer offered to pay the principal taxes of ksh 134 million in nine monthly instalments starting from September 25, 2021, a payment plan KRA says was not honoured.
In another plan, the brewer proposed to pay Sh500 million in 24 equal instalments starting December 2021 but failed to comply, according to the taxman.
KRA said In the two agreements, Keroche Breweries was to apply for remission of penalties and interests upon full settlement of the outstanding principal tax liability. However, Keroche Breweries did not honour the payment of instalments as per the agreements.
“By allowing any taxpayer to continue collecting taxes and not remitting the same, KRA will not be executing her mandate of ensuring that taxes that fall due are remitted in a timely manner and that all taxpayers remit their fair share of taxes,”
the taxman said in a statement.
The statement further noted that Keroche has now been accorded the opportunity to comply with the tax laws.
“To allow a manufacturer to sell their products without levying correct taxes or to collect taxes without remitting will amount to granting those evading taxes undue advantage over the many law-abiding taxpayers who diligently pay their taxes.”
KRA said.
According to KRA, this will introduce distortions in the market that will end up killing tax-paying businesses at the expense of those that do not remit taxes
In the end, this will mean that no taxes will be paid and employment will be lost when the tax-paying businesses close down due to unfair competition from those not paying taxes.
“KRA is committed to its mandate of revenue collection and trade facilitation. Addressing market distortions created by illicit trade which include non-payment of correct taxes is also trade facilitation.”
The KRA’s revelation is in response to Keroche’s plea for President Uhuru Kenyatta’s intervention after the authority shut the operations of the beer maker and froze its dealings with 36 banks.
Read also; KAM Reaches Out to Keroche Over Closure of Company.
