According to recent reports, the Tax Appeals Tribunal has ordered popular betting company; Betway to pay all of the taxes it had initially agreed to pay with regards to withholding tax on all professional fees.
The amount in question, is to the tune of a staggering 158 million Kenyan Shillings and is to be paid to the Kenya Revenue Authority (KRA).
The case that saw international betting establishment; M/S BlueJay Limited, which trades in Kenya as Betway Kenya contest the payment of various tax obligations that got to 158 million Kenyan Shillings, has now been ruled in favour of the Kenya Revenue Authority (KRA), by the Tax Appeals Tribunal.
M/S BlueJay Limited (Betway Kenya), attempted to halt the Kenya Revenue Authority (KRA) from collected additional withholding tax on all winnings achieved by its users as well as Pay As You Earn (PAYE) on all earnings of Mr. John Felix one of the company’s employees who was hired on retainer as an independent consultant.
With the ruling Betway has no other option, but to comply with the payment of the 158 million Kenyan Shillings sum to the Kenya Revenue Authority (KRA).
The taxes include outstanding withholding tax based on the gross winnings of 131.7 million Kenyan Shillings inclusive of penalties and interests since the initial time of assessment, taxes amounting to 9.95 million Kenyan Shillings and processing costs and capital costs with regards to research which hit 16.5 million Kenyan Shillings.
According to the Tax Appeals Tribunal M/S BlueJay Limited (Betway Kenya), computed the outstanding withholding tax on winnings on its net winnings. This is in direct contradiction to Section 34 of the Finance Act, 2016 which was in effect during the duration under review.
The Tax Appeals Tribunal also observed that with regards to professional fees during the seven (7) month period from the 1st of March 2016, to the 12th of October 2016, John Felix Kittony started out as an independent contractor but became an employee as soon as he was appointed as a Director. Once that happened, Betway Kenya was liable to withhold and also remit Pay As You Earn (PAYE) from the time he was appointed.
The decision by the Tax Appeals Tribunal could be devastating for Betway Kenya who only reopened in 2019 after obtaining clearance from the Kenya Revenue Authority (KRA), as well as an operating license from the Betting Control and Licensing Board (BCLB).
The betting company upon resuming operations following the shutdown of betting firms in Kenya, had stated that it would comply with all of the required regulations.
It added in a statement that, “To uphold full compliance with taxation laws, Betway will be deducting 20 per cent withholding tax from winnings in accordance with the law.”
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