• Brewer is accused of Sh14.4 billion tax evasion
Image: FILE
Keroche Breweries' director Tabitha Karanja has expressed shock following DPP Noordin Haji's decision to call for her arraignment over Sh14.4 billion tax evasion.
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".
She went on to say the same treatment may probably not have been given to a multinational company and expressed disappointment that a home-grown brand was being treated "unfairly".
On August 8, Karanja had written to the KRA commissioner general, accusing the taxman of "daylight robbery" after it allegedly reviewed the firm's tax obligations.
She also accused officers from the taxman's office of summoning her unprocedurally and subjecting her to humiliation in a three-hour cross-examination.
"I was handled and subjected to the most disrespectful and humiliating manners for a period of three hours," she said.
Karanja said she left the officers following reports of a "scheme" to arrest her.
DPP Noordin Haji on Wednesday called for the arraignment of Karanja and her co-director husband, Joseph, over Sh14.4 billion tax evasion.
The company is accused of evading payment of Sh12.34 billion VAT for stamps (Sh329.4 million), Crescent Vodka (Sh135.4 million) among other products.
Keroche is also accused of evading payment of excise duty amounting to Sh2.1 billion for the same beverages.
Karanja claimed KRA arbitrarily raised the exicise duty applicable to Viena Ice Ready to Drink Vodka, seven years after a different rate had been set, adding that the charges were backdated to 2010.
"They (KRA) raised a demand based on a rate that varied drastically from the status quo as it directed that the added 312ml water attract Sh94.9, translating to paying more tax than what is charged on any other alcoholic beverage," She said.
Karanja argued that meant that all water added in the Viena Ice ready to drink Vodka and consumed to date–for nine years – now attracts Sh221 per litre.
She said Keroche had remitted taxes on a monthly basis for nine years based on the 188ml Crescent Vodka, which the firm says is what is in the 500ml Viena Ice ready-to-drink vodka.
Keroche said it mixes 180ml of Crescent Vodka with 320ml of naturally distilled water professionally to come up with a 500ml drink, adding that it does not understand why the addition of water would attract Sh84 in additional excise tax.
She termed the tax regime "unacceptable".
"This is excessively punitive and unacceptable to both the consumer and the manufacturer. It’s day light robbery against consumers," Karanja said.
Karanja argued that Keroche has never charged or collected any tax on the 312ml naturally distilled water added in the 500ml Viena ready to drink Vodka because "it is not applicable".
In a statement on Wednesday, DPP Noordin Haji said investigations revealed the Keroche directors were found culpable of 10 counts of tax fraud.
The DPP said the KRA commissioner-general submitted an inquiry file to his office on August 18 and an audit by KRA established that Keroche Breweries had evaded payment of tax totaling sh14,451,836,375.