The Kenya Revenue Authority (KRA) has received the go-ahead to collect more than 2.7 billion Kenyan Shillings worth of monthly taxes on withholding tax on winnings from Sportpesa.
This is on the heels of 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 as well as from others, who have been failing to withhold tax on winnings.
The landmark ruling came from a 2014 suit filed by a Mr. Benson Irungu against Sportpesa Ltd trading as Pevans East Africa.
The suit aimed to stop Sportpesa from deducting and remitting taxes arising from winnings by Mr. Irungu and other individuals.
The Chief Magistrate Gesora while dismissing Mr Irungu’s case in his ruling, 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.
According to the budget statement of 2018 read by National Treasury Cabinet Secretary, Henry Rotich, taxes drawn from betting activities are channeled towards the financing of sports, art, cultural developments and the rollout of the Universal Health programmes.
