A tax dispute has arisen between the Kenya Revenue Authority (KRA) and Kenya Breweries Limited (KBL), stemming from tax abandonment during President Uhuru Kenyatta’s Jubilee administration. Documents presented to the Senate Trade, Industrialisation, and Tourism Committee reveal that KBL owes the taxman Sh12.037 billion as of the end of the financial year 2022/23. Specifically, the brewer owes Sh8.2 billion as tax assessment on remission from the Sh11.7 billion on Keg beer.
According to Humphrey Wattanga, the KRA commissioner-general, the Sh8.2 billion was initially abandoned, but the abandonment was revoked, and the matter is pending determination at the High Court. KBL had paid the KRA Sh3.5 billion between June 2015 and May 2016, addressing part of the total outstanding balance of Sh11.7 billion. Additionally, the company owes the KRA Sh3.83 billion, an amount outstanding from July 2015 to June 2020. This specific matter is currently under appeal at the Tax Appeals Tribunal (TAT) and is undergoing an alternative dispute resolution (ADR) process.
While KBL and the taxman have resolved tax cases related to Sh194 million and Sh83.9 million through TAT and ADR, Section 37 of the Tax Procedure Act stipulates that tax abandonment applies only when initiated by the KRA commissioner-general, who determines the grounds. Once determined, the commissioner-general refers the matter to the Treasury Cabinet Secretary for approval.
The Senate committee is investigating decisions by the Treasury and the KRA to waive taxes on various multinational firms in the final months of the Jubilee regime. As part of this inquiry, Chinese firm Huawei Technologies faces sanctions and is barred from doing business in Kenya after providing documents to Parliament explaining a tax waiver amounting 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 related to the construction of Konza City.
