The Kenya Revenue Authority (KRA) has received a go-ahead to collect more than Kshs 2.7billion worth of monthly taxes on withholding tax on winnings from Sportpesa.
This follows from a ruling by Milimani Commercial Courts Chief Magistrate, Peter Gesora, allowing KRA to collect withholding taxes on winnings from betting games on the Sportpesa platform among others, that have been failing to withhold tax on winnings.
The landmark ruling arose from a 2014 suit filed by a Mr. Benson Irungu against Sportpesa Ltd trading as Pevans East Africa. The suit sought to stop Sportpesa from deducting and remitting taxes arising from Mr Irungu’s and any other person’s winnings.
In his ruling, Chief Magistrate Gesora while dismissing Mr Irungu’s case noted that the nature of sport betting, winnings are unpredictable and a player cannot be certain of the amount that he will win.
“That being the situation, it is not sound to argue that certain amounts should not be collected by withholding tax agents. Revenue collection is well regulated by statute, and by the fact that Sportpesa is a tax agent is a clear indicator that all those using its platform are obligated to pay tax on their winnings,” Gesora ruled.
As per the budget statement read last year by National Treasury Cabinet Secretary, Henry Rotich, taxes drawn from betting activities are earmarked to finance sports, art, cultural developments and the rollout of the Universal Health programmes.
