The tussle between Kenya Revenue Authority (KRA) and Naivasha-based Keroche Breweries Ltd has taken a new twist with the taxman now asking the court to jail the directors of the firm over failure to pay Sh8 million as directed by a judge in July.
The directive was given by the High Court on July 14 as a condition for the taxman to reopen the firm for operations.
But KRA says in the latest application that even though it complied with the directive and unsealed the packaging line, opened the stores, and reactivated Excise Goods Management System (EGMS), the firm did not honour its part of the bargain.
Justice Alfred Mabeya certified the case as urgent and directed the case to be heard on September 6. “The application be served forthwith and be responded to before the hearing,” the judge said.
The taxman says the arrears stand at Sh14.2 million, which includes tax, penalties, and interest from March to May this year.
Ms Carol Kinya Mburugu, a KRA’s official in the legal department says the actions of the firm’s directors are clear indication that they have no intention of either paying the money or complying with the court order.
She asked the court to find Ms Tabitha Karanja, the chief executive officer, and Joseph Karanja in contempt of court and lift the order blocking the taxman from attaching the firm’s account so that it can recover the money.
She said allowing Keroche to continue operating and collecting taxes without remitting the same to KRA on the basis that 40 Kenyans will lose their jobs and livelihood gives the firm an undue advantage over other businesses who diligently pay their taxes.
The firm and KRA have had a long-running tax battle over the years, which has led to the shutting of the factory several times.
Last December Keroche had agreed to pay Sh21 million as a condition for reopening the factory and subsequent pay of Sh30 million, which was due in April.
Ms Karanja later moved back to court claiming she was under immense pressure to sign the agreement with KRA.
She said Keroche managed to pay Sh20.8 million so that the plant could be reopened but it was unable to pay the second instalment, leading to the closure in June.
Ms Karanja pleaded with the court to reopen the firm saying the shutdown would lead to the loss of 87,500 litres of beer, which has been filtered and ready for packaging, 1.2 million litres in six tanks of beer that are ready for filtration and packaging, and loss of Sh350 million if the beer is destroyed.
The company further said it will lose Sh35 million in monthly salaries and operational costs and accruing interests for loans taken in Absa, Equity, and Family banks.
