What happened

The company behind the beloved Peptang drink announced that it is currently in a tax dispute with the Kenya Revenue Authority (KRA). In the same breath, the firm disclosed that a recent legal name change has generated extra costs that were not budgeted for. Business Daily reported the dual challenge, noting that the tax issue and the re‑branding expense are straining the company’s cash flow. While the exact amount of the name‑change fees has not been disclosed, the situation highlights how regulatory and branding moves can intersect with tax compliance in Kenya.

Context and background

Peptang, a carbonated soft drink that enjoys strong sales in Nairobi’s informal markets, was launched in the early 2010s by a small‑scale manufacturer based in Kiambu County. The brand grew quickly, leveraging low‑cost distribution and aggressive social‑media promotion to capture a niche among young consumers. Over the years, the company expanded its product line and began exporting to neighboring East African countries, prompting a review of its corporate structure.

In late 2023 the firm decided to change its registered name to better reflect its diversified portfolio and to protect the brand from potential trademark disputes. The name change required filing new documents with the Registrar of Companies, updating tax identification numbers, and notifying the KRA of the alteration. Such procedural steps normally attract filing fees, legal counsel charges, and administrative expenses that can range from a few hundred thousand shillings to over a million, depending on the complexity of the corporate structure.

Concurrently, the KRA launched a routine audit of beverage manufacturers to ensure compliance with excise duty and value‑added tax (VAT) obligations. During the audit, KRA officials raised questions about Peptang’s tax filings for the 2022‑2023 financial year, alleging discrepancies in the declared turnover and the excise duty paid on sugary drinks. The tax authority issued a notice of assessment, demanding additional tax, interest, and penalties. The company has contested the assessment, arguing that the calculations do not reflect actual sales volumes and that some of the alleged under‑payments stem from mis‑interpretation of the new excise rates introduced in 2022.

The dispute has now moved to the Tax Appeals Tribunal, where both parties are presenting evidence. According to the tribunal’s public docket, the case is expected to be heard in the first quarter of 2025. In the meantime, the company must continue its operations, manage the cash outflow from the name‑change process, and prepare for possible settlement with the KRA.

Compared with what is normal

In Kenya, a corporate name change typically involves filing a special resolution, paying a filing fee of around Sh200,000, and engaging a lawyer to draft the necessary documents. For a small‑to‑medium enterprise (SME), total costs can climb to Sh500,000‑Sh1 million when accounting for stamp duty, notice publications, and updating bank accounts. By contrast, the Peptang maker’s expenses appear to be higher, as the company also had to revise its branding assets, redesign packaging, and re‑register trademarks across multiple jurisdictions.

• Filing fees: Standard fees are modest, but additional legal counsel for a complex restructuring can double the baseline cost.
• Branding overhaul: Redesigning labels, marketing collateral, and digital assets often adds another Sh500,000‑Sh2 million, especially when a nationwide launch is planned.
• Tax compliance impact: The simultaneous KRA audit means the firm must allocate resources to legal defence while covering the name‑change outlay, a combination that is uncommon for most SMEs.

Why it matters

The dual pressure of a tax dispute and unexpected re‑branding costs can have a ripple effect on the broader SME ecosystem. First, cash‑flow constraints may force the Peptang producer to delay supplier payments, potentially disrupting the supply chain for local bottlers and raw‑material vendors. Second, the heightened scrutiny from KRA signals that other beverage manufacturers could face similar audits, especially those operating in high‑tax categories like sugary drinks.

For Kenyan entrepreneurs, the case underscores the importance of aligning corporate restructuring with tax compliance timelines. A name change, while strategically valuable, should be synchronized with the tax calendar to avoid overlapping deadlines that could trigger penalties or additional assessments. Moreover, the visibility of this dispute may encourage other firms to review their excise‑duty calculations and ensure that their accounting systems capture every taxable transaction accurately.

Practical steps

• Review your company’s statutory filings and confirm that the name on your KRA records matches the one registered with the Registrar of Companies.
• Conduct an internal audit of excise duty and VAT calculations, especially if you have recently altered product formulations or pricing.
• Engage a qualified tax adviser before undertaking any major re‑branding or corporate restructuring to anticipate potential tax implications.
• Set aside a contingency fund of at least 10 % of projected re‑branding expenses to cover unexpected regulatory fees or legal costs.

Tax Planning & Compliance services at Beavoren Ventures can help businesses navigate name‑change procedures, align them with tax obligations, and represent you in disputes with the KRA.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.