Keroche bosses face arrest in Sh14bn tax evasion row

The founders of Naivasha-based Keroche Breweries will be charged in court on suspicion of evading taxes amounting to Sh14.4 billion in a new twist to the firm’s perennial wars with the revenue agency.

The Director of Public Prosecutions Noordin Haji on Wednesday ordered the arrest of businesswoman Tabitha Karanja and her husband Joseph Karanja for alleged tax evasion in their alcohol production business since 2015.

The Kenya Revenue Authority (KRA) has over the years been embroiled in a tug of war with the Naivasha-based brewer over tax computation method. In a previous tussle, KRA ordered excise duty on Viena Ice paid at Sh101.2 per litre while Keroche insisted on Sh26.4 per litre.

On Wednesday, Mr Haji said Keroche has not submitted Sh9.5 billion from Vienna Ice alone.

“The audit by the KRA established that Keroche Breweries Limited had evaded the payment of tax totalling Sh14,451,836,375. I am satisfied that there is sufficient evidence and that it is in the public Interest to charge the suspects with 10 counts of tax fraud,” Mr Haji wrote.

The two Keroche directors are expected in court today in a series of crackdown targeting suspected tax evasion in the alcohol sector which has also seen city billionaire Humprey Karuiki Ndegwa being arraigned in court on Monday to face Sh41 billion tax evasion charge.

The Directorate of Criminal Investigations last week confirmed the investigations into the alcohol tax evasion cartel has been extended to Times Tower, with officials of the Kenya Revenue Authority suspected to be involved in the multi-billion tax bleeding.

Like in the Mr Kariuki’s Thika-based Africa Spirits Limited, Keroche is suspected to have evaded the taxes for four years since 2015 despite the heavy investment and tight monitoring KRA has placed in the production lines of the brewers and distillers.

The alcohol industry is heavily regulated, with production monitoring machines installed in every licensed manufacturer’s production line to assign a unique tax stamp on every bottle passed.