KENYA – Kenya Breweries Limited, one of Kenya’s biggest breweries, has been slapped with a Kes 8.2 billion tax demand by the Kenya Revenue Authority (KRA), which the taxman had waived two years ago after years of negotiations.
The shocked beer maker said in a petition before the High Court that the demand by the KRA is prejudicial.
KBL pointed out that the KRA sent a letter reversing its decision to abandon the taxes on April 25, demanding it pays the amount within seven days.
The Subsidiary of East African Breweries Limited (EABL) explained that the taxman made the company withdraw a case it had filed before the tax appeals tribunal, challenging the excise duty and value-added tax from June 2015 to March 2017.
According to KBL, it reached a deal with KRA after exploring alternative dispute resolution out of court that required the taxman to drop Kes 11.16 billion on condition that the company paid Kes 3.5 billion and withdrew the case.
“The withdrawal of the appeals was in the belief that the tax issues had been fully settled and that the appeals were spent upon payment of the KES 3.5 billion,” senior counsel Kamau Karori said on behalf of the company.
The affidavit presented in the court stated that KBL applied for abandonment of taxes as per Section 37 of the Tax Procedures Act, which was approved in a letter on January 22, 2021, and the company wired Sh3.5 billion on January 25.
This is not the only case the brewer is battling in courtrooms. The company and its parent company are also faced with a Kes 39 billion (US$300.46m) push from Bia Tosha, one of the largest beer distributors in Kenya, for refusing to give it back beer distributorship routes in parts of Nairobi, Machakos, and Kajiado.
In a case at the High Court of Kenya, the distributor is also seeking the judge to punish three senior officials of EABL to civil jail for six months for allegedly disobeying court orders in a long-running court battle.
However, KBL has pleaded with the judge to suspend an application, arguing that the petitioner’s (Bia Tosha) applications are intended to pre-empt the outcome of the review application pending before the Supreme Court and to defeat any decision that the Supreme Court might make according to the said application.
In addition, Jane Karuku, together with Andrew Kilonzo, the managing director of Uganda Breweries Ltd, wants the apex court to review the decision issued in February, saying the court condemned them unheard.
In an affidavit, Mr. Kilonzo says that they have never been served with any contempt of court application at the High Court, Court of Appeal, or the Supreme Court, yet a serious charge has been made against them.
Similarly, KBL has accused the distributor of deliberately concealing some facts about the matter, thereby misleading the Supreme Court to make the contempt of court decision, without allowing them to be heard.
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