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Economy

KRA to block betting firms’ paybills in fresh tax row

Times Tower
Times Tower. FILE PHOTO | NMG 

The Kenya Revenue Authority (KRA) has renewed its battle with gaming firms, threatening to deactivate their pay bill numbers over failure to deduct and submit 20 percent excise tax on stakes despite a running court battle.

The taxman, in a public notice published Tuesday, also said it would suspend online operations of the non-compliant managers of betting firms, in a move that promises a repeat of last year’s showdown.

“We will suspend the pay bill numbers and online operations of non-compliant bookmakers,” the taxman said yesterday.

The Finance Act 2019 introduced excise tax on stakes placed on bookmakers by punters in a new directive that also required gaming companies to display the same deductions on betting slips.

KRA also imposed a 20 percent withholding tax on all winnings on compliant betting firms from last July.

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The taxes are in addition to 15 percent betting tax and 30 percent corporation tax.

Four betting enthusiasts have since moved to court to challenge a 20 percent excise duty imposed on all stakes placed by punters in a case set for hearing on March 20.

Mr Eugene Mwanje, Robert Opana, Dennis Kimari and Moses Muiruri moved to court last December saying the tax curtails betting.

They accused the National Assembly of unilaterally increasing the excise duty on stakes placed by the punters from 10 percent to 20 percent without public participation.

But Justice Weldon Korir declined to suspend the law even as he directed all the parties, including the Attorney-General, Cabinet Secretary for Finance and KRA to file their responses and submissions ahead of the hearing on March 20.

Last year, the taxman and Interior ministry suspended the accounts of several betting firms with a number of them shut down over tax evasion claims.

Last month, the Betting Licensing and Control Board published fresh rules restricting advertisement hours of betting firms to between 8pm and 6am during school days.

Adverts during school holidays and Saturdays will only be allowed between 9pm and 6am while on Sundays, the betting firms will only advertise between 8pm to 6am in strict measures aimed at protecting children from the addictive practice.

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