KRA, Kenya Breweries in Sh12bn tax row

Beer production line at the EABL plant in Ruaraka, Nairobi. FILE PHOTO | JEFF ANGOTE | NMG    

By EDWIN MUTAI More by this Author

The taxman is embroiled in a dispute with Kenya Breweries Limited (KBL) that arose from tax abandonment under President Uhuru Kenyatta’s Jubilee administration.

The Kenya Revenue Authority (KRA) documents tabled in the Senate Trade, Industrialisation and Tourism Committee show KBL owed the taxman Sh12.037 billion as at the end of financial year 2022/23.

The brewer owes the KRA Sh8.2 billion as tax assessment on remission from the Sh11.7 billion on Keg beer.

“The Sh8,204,929,625 was abandoned, however, abandonment was revoked and the matter is pending determination at the High Court,” Humphrey Wattanga, the KRA commissioner-general, said.

Read: Kenya Breweries wins suit against KRA in cider tax dispute

KBL paid the KRA Sh3.5 billion between June 2015 and May 2016 as part of the total outstanding balance of Sh11.7 billion.

It also owes the KRA Sh3.83 billion, an amount that has been outstanding from July 2015 to June 2020.

“The matter is currently under appeal at the Tax Appeals Tribunal (TAT) and is undergoing alternative dispute resolution (ADR) process,” Mr Wattanga said.

The brewer and the taxman have since resolved tax cases relating to the Sh194 million linked to a case that went through TAT and the ADR as well as Sh83.9 million which underwent the same dispute resolution.

Section 37 of the Tax Procedure Act provides that abandonment of taxes only applies where the KRA commissioner-general initiates such abandonment and determines the grounds.

Upon determination being made, the commissioner-general will refer the matter to the Treasury Cabinet Secretary for approval.

The Senate committee is probing the decision by the Treasury and the KRA to waive taxes on a number of multinational firms during the dying months of the Jubilee regime.

Chinese firm Huawei Technologies is among foreign firms facing sanctions, including being barred from doing business in Kenya after it provided documents to Parliament explaining how it got a tax waiver that has since accumulated to Sh1.92 billion.

An inquiry by the National Assembly’s Finance and National Planning Committee found that the ICT ministry failed to withhold and remit tax from Huawei that related to the construction of Konza City.

Read: KRA seeks to quash order blocking Sh8.2bn KBL tax demand

The Treasury also granted the ICT ministry a Sh1.9 billion tax waiver on what Huawei owed for laying the fibre optic cables.

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