Betway Kenya ordered to pay Kshs 158M in tax arrears

Sports betting firm, Betway Kenya has been ordered to pay the Kenya Revenue Authority betting taxes amounting to Kshs 158 million.

The ruling by the Tax Appeals Tribunal follows objection by M/S Bluejay Limited which trades as Betway Kenya

The Tribunal ruled in favour of KRA in a case in which the international betting firm, M/S BlueJay Limited, trading as Betway Kenya objected to payment of various tax obligations of the said amount.

According to KRA, Betway Kenya wanted to stop the taxman from demanding additional Withholding Tax on winnings derived from bets placed by punters and Pay-As-You-Earn (PAYE) on the earnings of one of its employee Mr. John Felix Kittony, who the company alleged to have retained as an Independent Consultant.

The Tribunal ordered the company to pay all the taxes it had agreed to pay in regards to Withholding Tax on professional fees.

“The taxes amount to Kshs 9.95 million, capital costs relating to research and processing costs of Kshs. 16.5 million and outstanding Withholding Tax based on gross winnings of KShs.131.7 million, inclusive of penalty and interest as at the time of assessment,” KRA said in a statement.

The Tribunal held that the Company had computed outstanding Withholding Tax on winnings on net winnings contrary to Section 34 of the Finance Act, 2016 that was applicable for the duration under review.

On Withholding Tax on professional fees, the tribunal observed that from 1st March 2016 to 12th October 2016 a period of seven ((7) months, John Felix Kittony was an Independent Consultant but became an employee immediately he was appointed director, and the company was liable to withhold and remit PAYE from the mentioned period.

  

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