Companies

Taxman asks regulator to suspend SportPesa licence

betting

Betting firms have been handed a reprieve after a Parliamentary committee cut taxation rates of two new levies proposed in the Gambling Control Bill. FILE PHOTO | NMG

The Kenya Revenue Authority (KRA) has asked the Betting Control and Licensing Board (BCLB) to suspend trading licences and paybill numbers of SportPesa and Finix Casino in the latest escalation of the battle between the firms and the taxman.

The KRA on November 8 wrote to BCLB, weeks after the High Court in Kakamega directed the firms not to deduct the 12.5 percent tax on betting stakes.

Read: Court freezes new SportPesa licence amid shareholder row

The court’s decision gave temporary relief to punters on the SportPesa and Finix Casino platforms but placed the two firms on a collision course with the taxman.

The KRA says it challenged the Kakamega High Court order, adding that further orders were made requiring the companies to make provisions for the excise tax for August.

“Both taxpayers have not complied to the court order despite our reminders dated September 29, 2023,” Weldon Ngeno, Commissioner for Domestic Taxes, said in the letter to BCLB’s chairperson Jane Makau.

“We hereby request you to kindly but urgently suspend all trading licences and pay bill numbers for SportPesa and Finix Casino until further notice.”

BCLB has, however, not enforced KRA’s wish, with punters still making deposits to their accounts using the paybill numbers of the two firms.

SportPesa had in October 2019 temporarily exited the Kenyan market following a prolonged court fight with the KRA over claims of unpaid taxes.

The firm also cited an unfair tax regime but made a comeback in 2020 after Milestone Games Limited acquired the SportPesa brand name from Pevans East Africa that pioneered sports betting in the country.

Finix Casino is the other gaming firm that was served with the High Court’s ruling in August to stop deducting 12.5 percent on betting stakes of punters on their sites.

Read: Forgery, non-existent lawyer claims in SportPesa licence row

The 12.5 percent excise tax means that for every Sh100 wagered, the KRA takes Sh12.50. This is in addition to a 20 percent withholding tax on every winning bet slip.

[email protected]