Keroche Breweries has sent 370 employees packing after the Kenya Revenue Authority (KRA) shut down its operations in May.
The brewer sent the staff on unpaid leave after it ran out of operational funds.
Keroche CEO Tabitha Karanja on Thursday confined the reports saying they are still fighting the taxman’s decision to shut them down.
“Yes it is true we have asked our workers to proceed on unpaid leave as we have run out of funds to run the company,” she said.
“We consider the decision by KRA to close our plant illegal and we will fight it.”
In a memo to its employees, the brewer said it was going to retain a few staffers from the quality department and engineering maintenance.
“It is almost two months since the packaging line was closed by Kenya Revenue Authority due to the Tax issue which you are all aware of. The management has tried to sustain the business despite the disruptions and closure, which has left the Company paralyzed with no means of getting any income to cater for its operational cost, pay salaries and other financial obligations, leading to several months of accumulated salary arrears,” read the memo.
Mrs Karanja who is vying for the Nakuru senatorial seat on a UDA ticket, claimed that because of the closure, the brewer was no longer able to support its employees and was unable to pay their Sh20 million monthly salaries.
The brewer was given a 24-month window in March to pay a tax debt totaling Sh957 million.
But according to KRA Commissioner General Githii Mburu, the brewer has declined to pay VAT from beer sales since its March reopening.
The taxman painted the company as a tax cheat that owes the government Sh22 billion in taxes.
“We also agreed they will remain up to date on current taxes so that when they sell, they will be remitting the dues. When they paid the initial payment and we reopened their facility, we waited for them to honour the payments but that did not happen,” Mr Mburu is quoted by Business Daily.
He adds: “The taxpayer did not honour the payment plan agreed upon for the third time…to allow a tax-evading business to continue operating despite it dishonouring all payment plans is to promote a culture of impunity, promote unfairness and allow a few to use public funds to enrich themselves.”