By S N
For me Keroche Industries must be spared this targeting by the DPP. There is a tax tribunal in KE handling KRA petitions and issues with Keroche. Let tax issues be left to dispute resolution. Negotiate and mediate there.
Kenyan industries should even be exempted when things become tough to preserve jobs. What is the wisdom prosecuting struggling businesses, take them down then next year you realize that you killed the goose that lays the golden egg because it hid some of her eggs from the poultry farmer? Even Tabitha avoided tax and bought herself mansions and invested in money markets, I am for dispute resolution not prosecution.
Hezbon Omollo is even more candid; read on..
KEROCHE CASE AS I SEE IT
The normal process of dispute resolution on tax matters begin with an assessment by KRA which is concluded by a tax demand.
The tax payer is at liberty to dispute by filing an objection.
KRA then reviews the objection and renders a decision whether to accept the objection. All this is done under guidance from Tax Procedures Act 2015.
The decision of the Commissioner on the objection application by the tax payer must be rendered within 60 days from the date of the submission and receipt.( this is likely to change with the new finance bill 2019). If dissatisfied , the tax payer has leeway to go to Tax appeals tribunal which will listen to both parties.This is the first stage of a fair arbiter and the TAT is a quasi judicial court that renders a decision in line with dictates of TPA(Tax Procedures Act). It can also recommend ADR(Alternative Dispute Resolution)for both parties . If ADR fails the TAT decides the matter and any dissatisfied party can go to High court. Gradually until Appeals court.
Only after this is exhausted and matters canvassed settled should enforcement be taken like the kind I am seeing on Keroche.
Remember during all this process, taxes not in dispute must be paid before TAT can listen to a tax payer or alternatively a payment plan entered into to the satisfaction of the commissioner.
Now the issue of Keroche centers on interpretation of Customs& Excise Duty act on how to tax the spirit drink in question.
Do we tax the mixed drink or the neat alcohol in it? Should water be taxed because this is a pre-mixed drink meant to address misuse of strong whiskies.(So a 750ml bottle of same whisky would attract less tax because it’s not mixed with water. Keroche has done a post production mix with water to address lethal consequences of rwata rwata consumption habit of our youths)
It is the matter that has to be determined before evasion of tax can be evoked.
So according to my understanding the real dispute is in interpretation of the Act which TAT or High court can deal with without being criminalized ab-initio.