Relief for Keroche in new KRA deal

In a notice on Wednesday, the tax man says it has reached an agreement with the brewer which will see the firm pay Ksh.957 million in undisputed tax arrears for the next 24 months with the first payment backdated to January.

Subsequently, KRA says it will lift agency notices issued to 36 banks which had blocked Keroche Breweries from accessing new financing from lenders to boost its operations.

The deal which was signed on Monday will see Keroche Breweries reopen its plant for operations after a new two months hiatus enforced by KRA’s sanctions.

Last Wednesday, Keroche said it was seeking an 18-month moratorium to regularize the payment of current taxes whose non-payment were the force behind the brewer’s closure at the end of January this year.

While KRA had accused Keroche of using collected taxes as working capital to finance operations and other CAPEX expenditures, the brewer CEO Tabitha Karanja insisted the default had been a factor of poor business cash flows.

“Failure to be up to date on the payments was explained to KRA as low business leading to poor cash flows that could not fully meet all the cash obligations of the company including taxes, utilities, and salaries,” she said.

The closure of Keroche Breweries had placed an estimated 250 direct jobs at risk.

Both KRA and Keroche have now agreed to resolve other ongoing tax rows through the Alternative Dispute Resolution (ADR) mechanism.

“The addendum agreement which flows from earlier ADRs processes will see the rest of the taxes owing from Keroche dealt with as agreed between the two parties in already signed resolutions,” KRA stated.

KRA is claiming more than Ksh.20 billion from the brewer in tax arrears tied in secondary rows.