KRA Picks New Fight With Top Betting Firm

Kenya Revenue Authority (KRA) has renewed its row with top betting firm Betika over a Ksh1.75 billion tax demand.

KRA has reportedly demanded Ksh832.45 million from the firm’s accounts at KCB and Guaranty Trust Bank for four months between September and December 2018 and a further Ksh587.63 million for the period between January and February 2019.

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KRA headquarters at Times Tower. (Courtesy)

According to a report by Business Daily, the taxman is demanding a further Ksh328.1 million for the accrued penalties and interest after the betting firm, which is owned by Shop and Deliver, failed to comply.

KRA now wants the entire amount deducted from Betika’s accounts before the determination of the case by Tax Appeals Tribunal.

On the other hand, the betting firm wants the taxman barred by tribunal from enforcing the demand pending determination of the case where it is disputing the claim.

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Brazillian football legend in Kenya for Betika exhibition match. (Courtesy)

This is the latest similar battle pitting KRA and betting firms that has forced SportPesa and Betin to close shop in the Kenyan market.

SportPesa had grown rapidly in Kenya to dominate online betting with the government, KRA and the investigative website, Finance Uncovered, all estimating the firm’s monthly revenues at between Ksh6 billion and Ksh8 billion —translating to annual sales to about Ksh100 billion. The company, however, put its annual revenue at Ksh20 billion under what it calls Gross Gaming Revenue.

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Sportpesa CEO Ronald Karauri. (Courtesy)

Before sending its workers home, Sportpesa had questioned the government’s taxation model.

“The government should not tax Excise Duty on the entire value of the transaction,” the company has said in earlier communication with the media. “If excise duty is charged on the revenue of the betting company or as winnings for a player, this would amount to double taxation.”

Estimates suggest that the shutdown of SportPesa and Betin resulted in 2,500 direct jobs losses, ranging from employees to commission-earning agents who power the companies’ strong retail network across the country.

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