Kenya: Government, Betting Companies At Odds

Nairobi — THE Kenyan government has secured a major legal victory after a tribunal ordered an international betting firm to pay taxes totaling Kshs158 million (R24,6 million).

Betway has been objecting to payment of various tax obligations, as demanded by the Kenya revenue Authority (KRA).

Betway Kenya wanted to stop KRA from demanding additional withholding tax on winnings derived from bets placed by punters and Pay-As-Y ou-Earn (PAYE) on the earnings of one of its employees, John Felix Kittony, who the company alleged to have retained as an independent consultant.

The deadlock dates back to 2016.

The tribunal held that the betting company had computed outstanding withholding tax on winnings, contrary to Section 34 of the Finance Act, 2016 that was applicable for the duration under review.

On withholding tax on professional fees, it observed that from the period under review (March 2016 to October 2016) Kittony was an independent contractor but became an employee immediately he was appointed director, and the company was liable to withhold and remit PAYE from that time.

Paul Matuku, KRA Commissioner for Legal Services amd Board Coordination, hailed the tribunal's ruling.

President Huru Kenyatta's government and the betting companies have been at odds.

In 2018, the National Treasury introduced a 15 percent tax on betting companies and 20 percent withholding tax on all winnings.

Last year, the government again imposed the industry with additional taxes, introducing a 20 percent excise duty charge on any amount staked.

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