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

Tax Appeals Tribunal has ordered Keroche Breweries to pay the Kenya Revenue Authority (KRA) 9,116,835,985 shillings in taxes after the firm lost a protracted dispute.

“The KRA is set to collect a tax of Kshs 9,116,835,985 .00 from Keroche Breweries Limited with regard to products manufactured and marketed by Keroche breweries Limited,” said KRA in a statement.

KRA says “this follows a big win by the Kenya Revenue Authority in the six (6) Appeals filed by Keroche before the Tax Appeals Tribunal in 2015 and 2017 respectively.”

The contention between Keroche and KRa was on the manufacturing process of the Vienna Ice Brand of Vodka. The brewer argued that the Vienna Ice brand of Vodka was not a distinct product from Crescent Vodka since Vienna Vodka was produced by diluting Crescent Vodka which process did not amount to manufacture.

In its judgment, the Tribunal said that Keroche Breweries Limited was involved in the compounding of spirit which amounts to manufacture within the meaning in Excise Duty Act, 2015 and Customs and Excise Act, CAP 472 (repealed)as such Vienna Ice was a distinct product for which Excise Duty was payable.

The Tribunal, however, faulted the Authority for levying interest and late payment penalties for the period the disputes were being litigated at the High Court and the Court of Appeal which had directed that the matters be heard at the Tax Appeals Tribunal.