Nairobi — The recent pronouncement of a court judgment has sent shockwaves rippling through Kenya's betting industry, triggering a dramatic upheaval in the sector's landscape.
In a twist that caught many by surprise, Justice Patrick Otieno of the High Court has delivered a verdict that has left the betting world in a state of flux, leaving its mark on not just avid bettors but also the major players in the field.
At the core of this transformation lies the long-standing 12.5 percent excise duty that has been a fixture in the betting world.
Justice Otieno's decision has thrown this tax into uncertainty, signaling a radical departure from the established norm.
SportPesa, in a move characterized by its boldness and novelty, has sprung into action in response to the court's ruling.
Justice Otieno has directed that the excise tax should remain uncollected until the application submitted by a dedicated betting enthusiast, Edward Okwama, undergoes a comprehensive hearing and resolution.
SportPesa has been expressly prohibited from deducting the excise tax from bets placed by enthusiastic fans during the ongoing case.
This directive, known as a "temporary conservatory order," stands as a pivotal pillar of Justice Otieno's judgment.
Recent withdrawals made by a punter serve as evidence that these transactions remain untouched by excise duty.
Edward Okwama's legal crusade is rooted in his unwavering belief that the current tax law is intrinsically unjust.
It enforces a uniform deduction on bets, regardless of whether the bettor emerges victorious or faces defeat.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
He vehemently argues that this approach contradicts fundamental taxation principles and asserts that excise duty should only be applied when actual earnings or winnings are involved.
"The glaring issue with this provision is that it imposes a 12.5 percent excise duty on the applicant and fellow sports betting enthusiasts and participants every time they place a bet or engage, irrespective of the outcome," Okwama ardently declares.
Furthermore, Okwama spotlights what he perceives as a glaring double standard. He questions why the government insists on applying excise duty to bets while not extending the same principle to other sectors.
He posits that this leads to a scenario where bettors essentially endure double taxation, as they also contend with a 20 percent withholding tax on their winnings.
Justice Otieno has taken it a step further by instructing Okwama to serve the betting companies, the Kenya Revenue Authority (KRA), and the Attorney General within a tight 14-day timeframe.
The case is scheduled for mention on September 21, with the potential to revolutionize the betting landscape in Kenya.
The court's decision, coupled with SportPesa's audacious response, has set the stage for an unprecedented transformation within the betting industry.
The outcome of this legal battle promises to usher in a new era, affecting not only the taxation of bets but also the broader dynamics of sports betting within Kenya in unforeseen ways.
