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KNCCI calls for negotiation in tax evasion cases

In Summary

•Last week, Keroche CEO Tabitha Karanja was arrested by the DCI detectives at the breweries' premises in Naivasha

KNCCI says a negotiation window between suspected evaders and the tax collector should be employed to salvage businesses

Richard Ngatia
Richard Ngatia
Image: COURTESY

Kenya National Chamber of Commerce and Industry has requested the government to take a different approach in tax evasion arrests to avoid disrupting businesses.

KNCCI chair Richard Ngatia said the manner in which suspected tax defaulters were being hauled was would have a negative impact on the economy as it would force business owners to close shop.

Ngatia who was accompanied by KNCCI Embu chairman John Mugo said if business persons suspected to have defaulted in revenue payment are treated harshly they will eventually close down their premises meaning the government stands to lose even more revenue.

“There are ways that you can negotiate with them, there are ways that you can have payment plans with them, and there are ways you can assist them to do their businesses within the law,” he said.

Last week, Keroche CEO Tabitha Karanja was arrested by the DCI detectives at the breweries' premises in Naivasha.

Karanja, who was arrested alongside her husband were accused of evading payment of tax amounting to Sh14,451,836,375.

In an inquiry filed by KRA commissioner-general to DPP Noordin Haji’s office on August 18, an audit established that Keroche Breweries was accused of evading payment of Sh12.34 billion VAT for stamps (Sh329.4 million), Crescent Vodka (Sh135.4 million) among other products.

Keroche was also accused of evading payment of excise duty amounting to Sh2.1 billion for the same items.

In a statement on Wednesday, Karanja said the company has not been involved in tax evasion and said it was inappropriate for the firm to be subjected to "humiliation and intimidation".

Ngatia said that while there was need for prompt payment of taxes, a negotiation window between suspected evaders and the tax collector should be employed to salvage businesses.

 He added that the business lobby group had partnered with KRA to educate the public and business owners on how they should pay taxes and how they can engage consultants and auditors to keep their books in order.