Is Keroche Breweries Being Choked For Another Foreign Company?

On Wednesday, the Tax Tribunal gave Kenya Revenue Authority (KRA) a go-ahead to collect a total of 9 billion shillings in taxes from Keroche Breweries.

In an exciting statement, the Kenya Revenue Authority said it was ready to collect the amount as directed in the ruling by the Tax Tribunal.

There are different opinions flying around about the issue; some are for Keroche Breweries and some are for Kenya Revenue Authority.

Let us say Keroche Breweries owed KRA the said amount, what would be the best way to collect it? Demand for it at once and let the company collapse or let the company operate and collect it in installments?

Keroche Breweries controls less than 3 percent of the market share. The largest player is East African Breweries Limited with a turnover of around 16 billion shillings. Let us say Keroche Breweries is just worth 8 billion shillings, what will remain of it after the 9 billion shillings tax is collected?

What will happen to so many employees and families that the company supports? What will happen to the revenue that the government has been generating? It is sad to note that our government would rather collect 9 billion shillings from a company and let it die than letting it operate and collect 10 billion shillings in 10 years.

That aside. Is Keroche Breweries being choked for another foreign company to set up business in its place?

Keroche is situated in Naivasha. It is interesting that another Danish company is planning to set a similar business in Naivasha, where Keroche Breweries is located. It appears Kenyan authorities have a peculiar habit of killing their own and letting foreigners flourish. Why should we bring our local investors down for foreigners to prosper?

This case brings back another similar case that involved billionaire Humphrey Kariuki and Kenya Revenue Authority. KRA was demanding more than 40 billion shillings in the form of taxes from the businessman. The matter went to court and KRA is likely to come out with nothing.

It also brings back the memories of SportPesa. KRA accused SportPesa of not paying taxes despite overwhelming evidence, including cases where KRA awarded SportPesa for being prompt and genuine taxpayers. SportPesa was frustrated and forced to shut down. More than 400 employees lost their jobs. Above all, the sporting sector in the country has never been the same.

This case also brings back the memories of Betin. The company was frustrated by the Kenya Revenue Authority until it closed down. 2,500 employees lost their jobs and thousands of other families affected.

In 2019 alone, it is estimated that close to 25,000 people lost their jobs as businesses closed down and others cut down on their workforce to reduce costs. Most of the companies that shut down blamed KRA for their woes as well as the high cost of doing business in Kenya.

Do you remember the case of mercury sugar? Did we have any contaminated sugar then by the way? No. It was a business rivalry. A certain business wanted another business out of business. What did they do? Use State machinery to frustrate competitors. Why do you think no one was ever prosecuted for having “contaminated sugar”?

I am not saying that businesses should not pay taxes but KRA is shooting itself in both feet and will soon have itself to blame. Why can’t the taxman put down a mechanism of talking and agreeing with those who owe them on the best and fair formula to pay?

READ: Tax Tribunal Orders Keroche Breweries To Pay Ksh 9 Billion In Taxes