Naivasha-based brewer CEO Tabitha Karanja has today threatened that the shut down of Keroche Industries will render more than 255 direct employees jobless because of the tax evasion cases she is facing.
Kenyans need to ask themselves what has made the Keroche vs KRA tax dispute become almost toxic and a subject that has severely divided public opinion in Kenya?
Let me start with what Keroche CEO Tabitha Karanja has shared today on her socials the fast mistake was to appreciate Uhuru Kenyatta-who under his administration she has accused of closing down her industry-has done a " commendable work ". "It’s been a minute. Here is my statement in regards to what is happening at Keroche limited. I wish to start by commending the Jubilee Government for the commendable work done during its two terms. This is evident from the peace the country has enjoyed and the big-ticket projects completed on the infrastructure front not forgetting the growth of the economy from a low of 3% to about 6%. However, mid-stream the second term of the government, an unprecedented global pandemic in the name of Covid 19 hit the whole world. To be precise, the first case of Covid 19 was diagnosed in Kenya in March 2020. The effects of the pandemic were not only on the loss of lives but serious erosion of the business environment leading to the closure of businesses, loss of employment and the attendant income among other effects. The GOK put some temporary measures in an attempt to mitigate the effects of Covid 19. Some of the measures included a reduction in the standard VAT rate from 16% to 14%, Corporate tax rate from 30% to 25% and pushing up the minimum taxable threshold for individuals for PAYE purposes. Though the gesture was appreciated, it did not reduce the pain caused by the pandemic to the expected level. The above measures were withdrawn in 2021 when the pandemic was still on the increase. I would like everyone to understand. I would like the media to have the right story and the right perspective devoid of planted explanations because as a country, we need job creators to thrive. We need to grow. We need entrepreneurship to succeed." Tabitha Karanja shared on her Twitter handle. Let me pause for a minute, How can Tabitha Karanja, who has reportedly not paid more than Ksh24 billion in taxes say that she appreciates how the "good and commendable" the Uhuru and Ruto administration she says it has financially fought her has been heard in the same sentence saying it did a commendable job? In March 1997, KeBs approved Viena Fortified Wine . On June 4, 1997, KRA gave it a classification – Tariff HS Code 22.04 or 45 per cent of ex-factory value as the excise duty. This was reconfirmed on April 27, 1998. However, in November 2006, KRA disrupted this arrangement. They wrote to Keroche saying they had made a mistake by classifying Viena under Tariff HS Code 22.04, and, a decision had been made to reclassify the product to a higher Tariff HS Code 22.06 or 60 per cent of ex-factory value as the excise duty. KRA issued a notice to backdate the new 22.06 tariff for five years to recover their “error” amounting to Sh1.2 billion.
According to Tabitha Karanja, KRA had closed down the Naivasha-based Keroche breweries with over two million litres of beer worth Sh512 million still in tanks. Tabitha says the liquor would go to waste in seven days.
Tabitha also says that Keroche's closure will directly affect 255 Kenyan families. Let's discuss this briefly. There are motorcycle riders, car owners, wines and spirits distributors that might be actively engaged in her brand-its not necessarily in Naivasha nor Nakuru alone. So, let's hypothetically say Keroche boss affects 255 by 3(the least a family can have) it affects 755 Kenyans on daily basis. Indirectly, these people have the only imaginable figure but make a real impact on the drink Tabitha's company produces. "As we got into 2022, the cases of Covid 19 started going down but the post-Covid 19 effects are being felt harder. The effects are being aggravated by the current political climate as we get closer to the August 2022 General Elections. She hoped that githeri media listens to her & others can document the true picture of exactly what is happening on the ground in regards to how businesses are struggling. The government should re-evaluate the post-Covid effects and the impact they have on the different sectors of the economy in order to formulate policy measures that will rejuvenate the players and by extension the economy. Without re-inventing the wheel, the government can borrow a leaf from the west where businesses have been extended grants, tax breaks, moratoriums and low-interest loans. The reality of Covid 19 pandemic impact; case in Point-Keroche Breweries Ltd: Why is @keroche_ltd is not being allowed to operate yet we have complied with everything. We are open and we have been pushing for a solution. Is it malice? Is it deliberate sabotage?" Kerocho CEO Tabitha Karanja shared on her Twitter handle. Will I be wrong if I say that Tabitha Karanja wants to terminate the contracts of 250 Kenyans without honouring their agreement with her brewer in the name of the KRA tax war against her? Or, Tabitha Karanja wants to play dirty politics of getting the fired employees campaign for her-mostly for free-in the name of "If elected, I will re-open the multi-billion industry! Why am saying that, since its establishment, the company has been riddled by anomalies, with scores of lawsuits including breaches of employee contracts and unjust terminations, failing to pay benefits, and fabricating bogus reasons for termination without pay, such as redundancy? The booze industry has tried to portray itself as a saint, but the breaches with employees show otherwise. In 2017, for instance, Paul Wachiuri Ndonga accused Keroche Breweries Limited of unfair termination of employment without notice or hearing with the given reasons lacking validity and denying the employee payment of the terminal dues owing. Keroche was to pay Ksh1.4 million in compensation. In another similar instance, The court awarded George Njogu Ndungu a total of Ksh920,833 it was established that Keroche had terminated the Claimant unfairly disguised as redundancy and without following due process. At least once, the entire family has made the press for the wrong reasons. For example, after being sued for Sh19.9 million, the "Beer Empress" Anerlisa Muigai, the Karanjas' daughter, was featured in the local daily . According to court documents, Anerlisa took out three loans totalling Sh13 million from Dennis Mwangeka and put up two suvs as collateral: a Range Rover Evoque and an Audi Q7. Then She went ahead and defaulted. Following the car seizure, Dennis received a call from the Flying squad summoning him to the police station, stating that the vehicle being held "in lieu of the loans" had been stolen from the defendant's mother, Tabitha Karanja of Keroche Industries.
The multi-billion-shilling Keroche Breweries has not had the best history, just recently it has been all over the news over tax fraud that saw the two owners spend nights in cells. In what Karanja calls a political war on the company, an audit by the Kenya Revenue Authority established that the company had evaded the payment of tax totalling Ksh14,451,836,375.
Check this appeal number 13 of 2020, at The High court in Nairobi. But, there are questions that Tabitha Karanja doesn't want Kenyans to ask her. You can't just seek sympathy, tell the people the truth when there is nothing else. Lemme explain. Excise is the tax paid by consumers on products that have been produced and sold locally. How does Covid 19 come on taxes already collected by Keroche Limited from consumers?
Should one, Keroche CEO Tabitha Karanja, be allowed to collect taxes and use them for private purposes instead of remitting the same as required by law? _keroche-CONSENT Keroche Breweries Limited owners Joseph and Tabitha Karanja
Lest we forget. Tabitha alongside her husband Joseph Karanja are wanted over claims of evading tax to the tune of Ksh14 billion ($140 million).
I wonder, where is Tabitha Karanja getting money for her campaigns and does not want to pay taxes? Who is fooling who?
She has already admitted owing Kenyans 322 million but cannot pay yet she can get money to splash during the campaign! But when it comes to paying billions of taxes, she says she's broke!
With a production factory capable of generating 30 distinct brands, Keroche is aiming for more than 20% of the market share in the region. Since its beginning 18 years ago, the firm has experienced consistent growth.
Tabitha has declared her intentions to contest the Nakuru senator seat in next year's General Election. Currently, the seat is held by Susan Kihika, who has announced her intentions to vie for the Nakuru governor seat. Tabitha will likely join former Nakuru senator James Mungai, Mike Weche, Andrew Yatich, former Nakuru Level 5 Hospital medical superintendent Dr Joseph Mburu and Daniel Kimani in the race to succeed Kihika.
Does the fact that Tabitha Karanja admitted owing Kenyans more than 16B shillings in accumulated taxes, mean her business has been modelled on tax evasion?