Betway claims that sections of the Finance Act 2018 which was enacted on September 21 imposes a retrospective taxation measure that was introduced on tax deducted from winnings.
The firm argues that the amendment of that law would therefore see unfair taxation for betting firms as it has been set to commence as from July 1.
Online betting company Betway has moved to block the taxman from backdating new tax measures stipulated in the Finance Act 2018.
Betway claims that sections of the Finance Act 2018 which was enacted on September 21 imposes a retrospective taxation measure that was introduced on tax deducted from winnings.
The firm argues that the amendment of that law would therefore see unfair taxation for betting firms as it has been set to commence as from July 1.
“We are bound to suffer irreparable financial damage as a result of the implementation of the amendments resulting in massive economic losses in our businesses,” says Betway’s lawyer Mathenge Ngotho.
The firm has sued the National Treasury Cabinet Secretary, Kenya Revenue Authority’s Commissioner General, the National Assembly, Speaker of the Senate and the Attorney General.
The chairman of the betting Control and Licensing Board is listed as an interested party in the case.
In their case documents, they argue that the amendments introduced in the Finance Act are vague, ambiguous and open to several interpretations.
The argue that Section 2 of the Act states that winnings of any kind and a reference to the amount or the payment of winnings shall be construed accordingly.
They also argue that under the Income Tax Act, the law states that the commissioner shall pay the taxes deducted from winnings into the Sports, Arts and Social Development fund.
They claim that it is unclear what the exact subject matter of taxation is implied in the said Act.
Last month, betting firms failed to secure a tax reprieve after Parliament threw out a proposal to reduce tax on gaming from 35 per cent to 15 per cent.
MPs defeated the proposal by the Finance and National Planning Committee which sought to reintroduce the amendments through the Finance Bill 2018 after shelving a similar bid in June through the Tax Laws (Amendment) Bill 2018.
President Uhuru Kenyatta reintroduced a proposal to cut tax on gaming from 35 per cent to 15 per cent.
Betways now wants the court to give an interpretation of the term winnings as per the new law and a declaration that their rights have been violated.
They also want the implementation date of the new taxes to be set from September 21, 2018.
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