Keroche loses bid to vary order on Sh500 million deposit in KRA tussle

A plea by Keroche breweries to review earlier order requiring it to deposit Sh500 million as a condition to stop KRA from recovering billions in tax arrears has dismissed.

High court judge David Majanja said he saw nothing new arising in regard to the nature of Keroche's business in regards to its tax liability and therefore he cannot vary the order for deposit of Sh500 million.

Keroche had said that the Covid-19 has had brought unprecedented challenges to its business which involves the sale of alcoholic beverages through hotels, bars and restaurants.

"As these businesses have closed in an effort to contain the spread of the virus, its sales have dwindled to the extent that it does not have the capacity to pay the sum of Sh 500,000,000 ordered by this court," said the brewer in its appeal papers.

It also said that its bankers had declined to provide any financial accommodation on account of the uncertain business environment and it has had to downscale its business to the extent of sending employees home.

Keroche offered to deposit Sh10 million as of now but the court did not accept this offer.

On its part, the State said Covid-19 is not a reason for the court to review the terms under which it imposed condition it earlier imposed.

The court was further urged to consider that it would be unreasonable to deny KRA money for the same reason that money is required to fight Covid-19.

The order for deposit of the Sh500 million was initially given by judge Majanja on March 16.

He had said they deposit the cash in 30 days failure to which then the temporary order stopping the Kenya Revenue Authority from recovering tax arrears will automatically lapse.

“I have considered all the factors and I find that the appellant (Keroche) is a going concern and the action by the respondent may cripple its operations. However, the taxes have been outstanding for long,” Majanja had said.