Kenya winnings tax dispute not over yet

The Kenyan Revenue Authority (KRA) will challenge the result of the recent sports betting tribunal, in which it was decided that the 20% tax law only applies to net winnings.

Sportsbooks in Kenya were relieved after the court ruled that this regulation, introduced back in July 2018, doesn’t apply to total stakes. The country’s sports betting scene had descended into disarray because of this dispute, and numerous operators lost their licences. One of these – SportPesa – has said that it’s considering a return after the court hearing. 

Along with defining what could and couldn’t be deducted, the court also placed certain restrictions on the KRA. These were imposed to shift tax remittance responsibilities away from the operator, and onto the bettors instead.

The dispute continues 

Kenya’s tax authorities aren’t happy with the outcome. According to the country’s media, these were the thoughts of the KRA’s legal boss Paul Matuku: 

“KRA disagrees with the TAT’s decision for, among other reasons, the fact that it departed from an earlier decision by Justice Hatari Waweru.

“In arriving at its decision, the TAT found that Waweru’s decision was inapplicable. Hence, it wasn’t binded because it hadn’t delved into the definition of the term winnings.”

The lengthy dispute had led SportPesa and Betin, plus their affiliates, withdrawing from the Kenyan market. The licenses of 25 other operators were also suspended. On top of this, hundreds of industry workers had to be laid off. 

After winning the initial tax dispute, SportPesa Chief Executive – Ronald Karauri – stated: 

“SportPesa will now reconsider the future of its operations in Kenya. We encourage the authorities to take the tribunal’s ruling on board, and to apply a reasonable approach to gambling regulation and taxation.”