More trouble for Keroche Breweries after court orders KRA to collect Sh9bnMarch 11, 2020
NAIROBI, Kenya, Mar 11 –
Keroche Breweries has been ordered to pay the Kenya Revenue Authority Sh9
billion by the tax tribunal after winning 6 lengthy disputes filed between 2015
In three of the Appeals, the
contention was the manufacturing process of Vienna Ice Brand of Vodka.
The brewer argued that Vienna Ice brand of Vodka was not a distinct product from Crescent Vodka since Vienna Vodka was produced by diluting Crescent Vodka a process that did not amount to manufacturing.
In the other three appeals, the
contention was regarding classification of pineapple-based wines.
KRA relied on the Compounding
of Denatured Spirits Act Cap 123 and argued that the process undertaken by
Keroche Breweries was compounding within the meaning of the Act.
“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of spirit which amounts to manufacture within the meaning in Excise Duty Act, 2015 and Customs and Excise Act, CAP 472 (repealed)as such Vienna Ice was a distinct product for which Excise Duty was payable,” the tax tribunal said in its judgment.
KRA, however, did not escape unscathed.
The Tribunal 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.
Last year, the director of
public prosecutions ordered for the arrests of the company’s directors Tabitha
Karanja and Joseph Karanja in connection to allegations of evading taxes.