Relief as Keroche, KRA Strike Deal

The Keroche tax saga that has captured Kenyans’ attention in recent weeks got a new chapter on Tuesday, March 16 after the brewer struck a deal with the Kenya Revenue Authority (KRA).

The news comes as a relief for Keroche’s over 800 employees who were staring at the prospect of job losses following the closure of the brewer’s Naivasha plant by KRA.

In a statement, KRA announced that they had agreed on a payment plan that will see Keroche pay Ksh957 million over 24 months beginning January 2022. The deal was agreed upon following week-long negotiations.

The taxman, who is demanding a total of Ksh22.79 Billion in unpaid taxes from Keroche, further noted that the new payment plan sets the stage for reopening of their Naivasha premises.

KRA also announced the lifting of agency notices issued to thirty six banks. The banks had been cautioned against lending to the family-owned brewer over the tax woes.

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“The addendum agreement which sets the stage for the reopening for production of the Naivasha based brewery will see Keroche settle an undisputed tax amount of Ksh957,000,000.00 over a period of twenty four months starting from January, 2022.”

“The addendum agreement which flows from earlier Alternative Dispute Resolution processes will see the rest of the taxes owing from Keroche dealt with as was agreed between the two parties in the Alternative Dispute Resolution Agreements already signed,” the statement read in part.

Keroche had on Wednesday last week requested that KRA reopens the premises to avoid major losses, and to grant it a grace period of 18 months to clear taxes in arrears while paying the current taxes as they fall due.

They argued that they had been unable to honour an earlier payment plan due to regular disruptions by the taxman.

Keroche founder Tabitha Karanja ruled out a potential stake sale by Keroche to help sort out the tax problems. She asserted that she wanted the 25-year old firm, Kenya’s second-largest alcohol manufacturer after Diageo-owned EABL, to survive the current challenges.

The battle has become a focus point for discussions on the state of business and taxation in Kenya, with many in the business community rallying around Karanja and Keroche while accusing KRA of choking homegrown businesses.

“Going to sell Keroche I don’t see it happening.”

“I don’t think it can be the best option. Everybody would want Keroche to survive so that we show that we can also do it,” she stated at a media briefing.

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