The Kenya Revenue Authority (KRA) has cleared 105 betting firms paving the way for the issuance of their operating licences in the financial year ending June 2023.
The taxman said it cleared the firms between the start of last month and August 5 setting the stage for the renewal of their licences by the Betting Control and Licensing Board (BCLB).
Betting firms have in recent years been caught up in disputes with the taxman, leading to the controversial exit of some of the firms most notably SportPesa and Betin.
“Between July 1 and August 1, 2022, a total of 105 companies have been cleared by KRA for issuance of BCLB licence,” the taxman told the Business Daily.
The KRA has in the past been embroiled in tax disputes with betting firms, the most notable cases being three years ago.
The taxman was pushing for tax arrears estimated at more than Sh90 billion from SportPesa (previous under Pevans East Africa) and Betin prompting a stand-off that led to the closure of businesses by the two firms.
The tax disputes have mainly centered on the amount that the betting firms should have withheld from punters for the winning bets.
The government re-introduced a 7.5 percent tax on betting stakes from July last year in a bid to make the venture less attractive.
The tax is in addition to the 20 percent that is charged on every winning bet. Betting firms withhold this tax on behalf of the KRA.
Betting firms are also taxed on the gross gaming revenue — turnover minus winnings paid out — at a rate of 15 percent. They also pay corporate tax on profits at a rate of 30 percent.
But the betting firms have defied the increased taxation and grew to 118 in the 2021/22 financial year from 100 a year earlier.
Clearance for licensing by the BCLB is subject to approval by a multi-agency committee highlighting the tightened scrutiny by the State on an industry that has been flagged for money laundering.