The taxman and businesses need a cordial relationship

The row between the Kenya Revenue Authority (KRA) and Naivasha-based Keroche Breweries degenerated to a level that differences between the taxman and taxpayers should not sink to.

Yes, render to Caesar what belongs to Caesar, but there would be no Rome without both Caesar and his subjects. Both the taxman and the taxpayer need each other and despite their differences, they should figure out how to co-exist. There are many avenues to resolve disputes without having to publicly throw mud at each other.

For starters, KRA should not be the entity that strangles to death and even presides over the funeral of local businesses but should instead play a facilitating role for companies to ensure that they remain afloat and in turn continue paying taxes.

The allegations made by Keroche Breweries Chief Executive Tabitha Karanja that KRA appeared hell-bent on killing her company have been repeated several times.

Justice Weldon Korir last year warned that KRA, if it continued with the trend of shutting down businesses in the guise of collecting taxes, would end up with a smaller taxpayer base and would perennially have the problem of never hitting tax collection targets.

The judge was coincidentally ruling on a case by another brewer, Mount Kenya Breweries, which had gone to court after KRA shut down its operations, owing to claims that it had been using fake excise duty stamps.

Justice Korir said KRA’s survival depends on the existence of income generating businesses from which it can collect taxes. Dead companies cannot pay taxes.

The flipside to this is true. Businesses, and indeed all Kenyans, should pay their fair share of taxes to ensure the State continues playing its facilitative role and offer businesses a better operating environment.

While Keroche may have seen death beckoning going by the manner in which it described how KRA moved into its premises, it also acknowledged that it has tax arrears. The firm had also at some point collected consumer taxes such as excise duty and defaulted on passing these on to KRA.

It is encouraging that KRA has an Alternative Dispute Resolution (ADR) mechanism, which is meant to resolve tax disputes without resorting to adversarial avenues such as going through the tax appeal tribunal or the High Court.

Going through the ADR does not only save face for both parties but also money in terms of legal fees. We encourage KRA, and indeed taxpayers, to pursue this route more.