Sports betting firm Betika is fighting off a Sh1.75 billion tax demand from the Kenya Revenue Authority (KRA) in the latest dispute between the State and gaming firms.
Shop and Deliver, the company that owns Betika, in documents submitted before the Tax Appeals Tribunal wants KRA barred from enforcing the demand pending determination of the case where it is disputing the claim.
The taxman wrote to KCB and Guaranty Trust Bank demanding Sh832.45 million from the firm’s accounts for four months to December 2018 and a further Sh587.63 million for the period between January and February this year.
KRA is further demanding Sh328.1 million in what it says are accrued penalties and interest after the betting firm failed to comply.
“The matter is pending Judgement at the Tax Appeals Tribunal,” KRA said while confirming the demand in a terse statement on Friday.
The taxman wanted the entire sum deducted from the betting firm’s accounts pending determination of the appeal.
Betika had started deducting 20 percent tax on customer winnings in compliance with a KRA directive in August months even as betting firms betting firms challenged the tax and the definition of winnings.
The betting firm had said that “has no option but to deduct 20 percent on gross winnings” pending the determination of the case.
Betika‘s move to fight KRA’s tax demands is the latest battle between the government and gaming firms that has seen Sportpesa and Betin opt to close shop in the country this year.
The betting firm told the tribunal that its financial operations risk being crippled and could signal job losses.
So far, more than 2, 500 people lost their jobs after Sportpesa and Betin exited the market following similar battles with the taxman.
Industry regulator, Betting Licensing and Control Board had in July suspended the operating license of 27 firms following stand-off over a Sh61 billion withholding tax demand.