Sportpesa and Betin have a fortnight to remit Ksh8.5 billion withholding tax to Kenya Revenue Authority (KRA) or be closed as per interior CS Fred Matiang’i’s directive.
According to reports by Business Daily, Betin owes KRA Ksh5.29 billion while Sportpesa owes the taxman Kshh3.29 billion, withholding tax arrears.
KRA’s manager for debt enforcement Asha Salim has already written to Safaricom, which the the financial service provider for the two, to pay the amounts for Gamcode Limited (Betin) and Pevans East Africa (Sportpesa).
“I hereby declare you to be an agent of the above taxpayer (SportPesa) and require you to pay the sum of Ksh3,296,532,012 being tax due by the said taxpayer,” directs Ms Salim.
On April 1, Mr Matiang’i directed the Betting Control and Licensing Board that no betting company should allowed to operate from July 1 without proving it is tax compliant, which calls for clearance of all tax arrears.
“Subsection 13 of section 42 provides that, if without reasonable cause you fail to comply with this notice, you shall be personally liable for the amounts specified herein,” Ms Salim said in the demand notice.
The Finance Act 2018 requires all betting companies submit 20 percent withholding tax from gamblers of all their winnings.
However, the betting companies have argued that KRA should not include the principle amount in calculating the taxation.
In court documents, Betin and Sportpesa want the demands by KRA declared “unlawful, in bad faith, illegal, null avoid”.
Unconfirmed reports indicate that Betin’s accounts could have been frozen, as gamblers on the platform have been unable to withdraw their money for weeks now.
Gambling in the country has bee faced with a lot of opposition from activists and residents, who see it as an activity that is ruining lives and encouraging laziness.