Azimio la Umoja - One Kenya coalition presidential candidate Raila Odinga has criticized the government over the recent closure of Keroche Breweries.
The Kenya Revenue Authority (KRA) shut down the Naivasha-based brewer in May for reneging on the tax agreement on the settlement of arrears totaling Ksh300 million.
During a meeting with Mitumba traders at Thika Greens on Friday, June 17, 2022, Raila faulted KRA over the move he termed 'punitive.'
He said the government should be at the forefront of creating an enabling environment for the private sector to thrive.
"The private sector is the engine for economic growth worldwide. Therefore our government need to create an enabling environment for the private sector to thrive," Raila said.
"You do that by removing restrictive laws, removing bureaucratic red tape so that the private sector can be able to move and create wealth. It's not right to become very punitive in terms of taxation. If taxes are just too high there is a tendency to evade them. If they are low and manageable people will pay. So what you need to do is spread the net."
He noted that closing a business hurts business owners and employees who depend on the sector for their daily bread.
Raila asks KRA to give dialogue a chance.
Raila encouraged the authority to adopt negotiation to resolve existing tax disputes with Keroche and other firms.
"Don't kill Keroche. If there is a problem, tell them to pay tomorrow if they can't pay today. Don't kill the goose that lay the golden egg," he added.
He promised to prioritise issues affecting the sector if elected president in the August polls.
Keroche employees rendered jobless
Speaking in Naivasha on Tuesday, June 14, 2022, Keroche CEO Tabitha Karanja said the recent closure rendered over 400 workers jobless.
In March this year, Keroche and KRA signed a payment plan that would see Keroche settle an undisputed tax amount of Ksh957 million over a period of 24 months starting from January 2022.
Karanja said that KRA is demanding a total of Ksh322 million from the company. She pleaded with the taxman to give them more time and restructure the payment plan, terming the current payment plan as unsustainable.
"I still plead with the KRA to afford us an opportunity to get back on our feet and regain our footing as a manufacturer, employer and local indigenous business entity in order to sustainably meet all our obligations. I specifically request once more to be given a moratorium on the enforcement action that shut down our operations, and on the unsustainable payment plan that we agreed to under unbearable pressure," Karanja said.
KRA and Keroche have been in a 16-year-long tax dispute resonating around the classification of the brewer's products, leading to two agreements between the two parties, in July and December 2021.