taxBaddy: tax blog and news channel for global trends in tax policy, technology and related in VAT, income tax, customs,itax, excise and tax procedures.

taxNews

Kenya
KRA to appeal SportPesa, Betin victory on bet prizes tax dispute
id : 88 Litigation
posted by : Admin DOQ : 2020-06-07 05:05:34

The Kenya Revenue Authority (KRA) Monday said it has lodged an appeal against a ruling by the Tax Appeals Tribunal that a punter’s betting stake cannot be charged 20 percent tax on winnings. The taxman is also challenging another ruling that the responsibility for payment of the tax should be on the punters and not the betting firms, shielding the latter from prosecution and aggressive pursuit of the 20 percent withholding tax. The tribunal sitting in Nairobi had on Wednesday ruled that the 20 percent tax should be charged on the positive difference between the payout made and stakes placed in a given month. The case looks set to influence an ongoing tax dispute between KRA and more than 20 betting firms— including SportPesa and Betin Kenya—which have been denied operating licences for the year starting July.


“Kenya Revenue Authority (KRA) will challenge the judgment of the Tax Appeals Tribunal (TAT) delivered on 6th November 2019 in favour of the betting firms,” the taxman said in a statement. “KRA has commenced the appeal process by filing a notice of appeal, which it did on 8th November, 2019.” KRA has been demanding billions of shillings from betting firms based on the gross amount paid to the punters, including the staked amount. SportPesa on September 27 announced it was halting operations due to a drastic hike in taxes on betting stakes and the unresolved disputes with KRA. Betin Kenya also ceased its operations, citing the heavy taxation as the main reason. The Treasury last year reintroduced the 20 percent tax on winnings, and amended the definition of winnings to include the stakes, sparking the dispute with the betting firms. The earlier law provided for the 20 percent tax to be charged on net winnings, which is arrived at by deducting the amount staked by the punter. But this was revised to include gross winnings. “KRA is aggrieved by the tribunal’s finding that it had no legal backing in demanding withholding tax from the betting firms and the manner in which it had enforced collection of the tax,” said the taxman. The High Court had referred the dispute over tax on winnings to the tribunal after SportPesa, represented by Iseme, Kamau and Maema Advocates, sued KRA in a suit that saw other betting firms including Betin get enjoined. K RA has been demanding Sh8.59 billion from Safaricom as withholding tax arrears due from the two major betting firms - SportPesa and Betin Kenya. The taxman demanded that Safaricom pays Sh5.29 billion withholding tax arrears due from Gamcode Limited, trading as Betin, and a further Sh3.29 billion due from Pevans East Africa, which trades as SportPesa. The gaming companies largely relied on Safaricom’s network to take bets, communicate with users and process payments through paybill numbers. The government in July ordered Safaricom to stop processing payments for sports betting companies, effectively grounding their operations.
You may also like...

Taxation of Leases and Hire Purchase Transactions

The tax treatment of lease transactions in Kenya is based on whether the lease qualifies as a lease

Accounting For Lease IFRS-16 New Standard

BACKGROUND In January 2016, the International Accounting Standards Board (‘IASB’) issued IFRS

Independent Contractor vs Employee

By John Muiruri Reviewed April 06, 2021 The difference between being an independent contractor

Supreme Court to hear Sh5.6bn Coca-Cola tax dispute

The Kenya Revenue Authority (KRA) on Monday suffered a blow after the High Court sitting in Nairobi

VAT AND Deposits Where Is The Tax Point?

WHAT HAS CHANGED? HMRC has changed its approach to VAT on deposits. The change affects situations w

Uhuru's Gift to Tax Evaders Tax Amnesty On The Way by 2021

Kenya’s Taxman will introduce an amnesty programme for income tax, VAT and Excise Duty once the Fi

taxBaddy

taxBaddy	Direct tax	Indirect Tax	Tools	Treaty Watch	Tax Controversy	Trending
About Us	Business tax	VAT	PAYE Rates	Signed	Tribunals	Tax News
Contact_us	Employee taxes	Customs	Pension Rates	Ratified	Decided Cases	Income Tax Bill, 2018
Research	Capital Gains	Excise	Discussion Drafts	Pending	Offences	BEPS
Careers	Transfer Pricing	penalties	Q & A	Under Negociation	Litigation	OECD
one	two	three	four	five	six	seven

Indirect Tax	Tools
VAT	Paye Rates
Customs	Pension Rates
Excise	Discussion Drafts
	Q & A

Treaty Watch	Tax Controversy	Trending
Signed	Tribunals	Tax News
Ratified	Decided Cases	Income Tax Bill, 2018
Pending	Offences	BEPS
Under Negociation	Litigation	OECD
five	six	seven

	Trending
	Tax News
	Income Tax Bill, 2018
	BEPS
	Litigation

taxBaddy	Direct tax	Indirect Tax	Tools	Treaty Watch	Tax Controversy	Trending
About Us	Business tax	VAT	Paye Rates	Signed	Tribunals	Tax News
Contact_us	Employee taxes	Customs	calculators	Ratified	Decided Cases	Income Tax Bill, 2018
Research	Capital Gains	Excise	Discussion Drafts	Pending	Offences	BEPS
Careers	Transfer Pricing		Q & A	Under Negociation	Litigation	OECD
1	2	3	4	5	6	7
Indirect Tax	Tools
VAT	Paye Rates
Customs	Pension Rates
Excise	Discussion Drafts
Penalties	Q & A
3	4
Treaty Watch	Tax Controversy	Trending
Signed	Tribunals	Tax News
Ratified	Decided Cases	Income Tax Bill, 2018
Pending	Offences	BEPS
Under Negociation	Litigation	OECD
5	6	7
	Trending
	Tax News
	Income Tax Bill, 2018
	BEPS
	OECD
	7

Log-In-Form

Comments to stories

KRA to appeal SportPesa, Betin victory on bet prizes tax dispute

You may also like...