Court stops KRA from collecting Sh9bn from Keroche bankers

The High Court has stopped the Kenya Revenue Authority (KRA) from collecting Sh9 billion in unpaid taxes from Keroche Breweries’ bankers.

Justice David Majanja also ordered the brewer to pay Sh500 million to the taxman within 30 days pending hearing and determination of an appeal.

He also dismissed KRA’s bid to have the company provide security for its Sh9 billion demand, saying the brewer was exercising a right to appeal.

Keroche had gone to court on Monday seeking that the taxman be forced to enforce a stay order the brewer had obtained on Friday.

The High Court has further ordered the Tax Appeals Tribunal, that ruled in favour of KRA last week, to release its decision issued on March 9, within 48 hours and all proceedings within the next seven days.

KRA had threatened five top banks with multibillion-shilling penalties over their dealings with Keroche in the push to collect the Sh9.1 billion.

The taxman had given the banks up to April 11 to transfer cash in Keroche’s bank accounts to the agency’s coffers.

The five banks — Absa Kenya, Equity Bank, Diamond Trust Bank, Cooperative Bank and Standard Chartered — were to pay the Sh9 billion should they fail to comply with the transfer order.

The taxman last week announced that it had won an appeal filed before the Tax Appeals Tribunal in 2015 and 2017 by Keroche, allowing it to proceed with the collection of the outstanding taxes.

The Naivasha-based brewer is expected to struggle to raise the billions of shillings if the KRA has its way, placing the brewer’s assets and those of its shareholders at risk.