Kenyan liquor tycoon Tabitha Karanja has appealed to the government to intervene in a recent disagreement with the Kenya Revenue Authority (KRA) over a Ksh9.1-billion ($79.8 million) tax dispute that has resulted in the closure of Keroche Breweries.
Karanja, who founded Keroche Breweries in 1997, said the recent shutdown of the brewer by KRA has had a substantial impact on Keroche’s operations and resources.
According to BusinessDaily, Karanja said the interruption from the shutdown will result in economic losses for the country since thousands of people employed by the corporation, both directly and indirectly, may lose their employment.
“The recent closure by KRA has drained all our resources and unfortunately if nothing is done in the next seven days, we will be forced to drain down all the beer and lay down over 250 direct employees and thousands within our nationwide distribution network,” Karanja said.
Her appeal to the government comes about a month after the KRA shut down the brewer after it failed to pay tax arrears of Ksh332 million ($2.91 million) as part of an attempt to clear its long-running tax obligations.
The closure comes despite the fact that the Karanja-led brewer had requested a 12-month grace period to begin paying tax arrears due to the COVID-19 outbreak, which had harmed both its operations and its earnings.
Karanja noted that the business had to cut down on significant activities to survive, and it only maintained workers delivering vital services such as maintenance, while remarking on the strategic decisions made so far to survive despite the pandemic’s impact on Keroche’s operations.
She went on to say that the brewer now has almost 2 million liters of beer in storage tanks worth Ksh512 million ($4.5 million) and that the storage tanks cost Ksh30 million ($263,018) every month in maintenance fees.
Over the years, Keroche Breweries has grown to become one of the top companies in the Kenyan market for the selling of alcoholic drinks and wines under the leadership of Karanja and her husband, Joseph.
Keroche is Kenya’s second-largest alcoholic beverage maker and a key rival to the British-controlled EABL, with a 29-percent market share of the Kenyan alcoholic beverage industry.
Since 2015, the brewer has been at odds with the government over tax returns pertaining to one of its most well-known products, Vienna Ice vodka.
Karanja and her spouse were arrested in August 2019 for tax evasion totaling Ksh14 billion ($126.18 million). Between 2015 and 2019, they were accused of “mis-declaring” tax and VAT. They were freed on bail of Ksh12 million ($108,156).