BY SAM ALFAN.
Kenya Revenue Authority has been allowed to collect more than Sh2.7 billion worth of monthly taxes from by betting company Sportpesa.
Milimani Commercial Chief Magistrate Peter Gesora ruled that KRA to collect all withheld taxes on winning from betting games on Sportpesa platform among others.
This is after Benson Irungu filed a case against Sportpesa limited trading as Pevans East Africa. The case was seeking to stop Sportpesa from deducting and remitting taxes arising from Irungu’s and other winners.
“The application dated April 11,2019 be and is hereby dismissed with costs to the interested party,” ruled Gesora.
While dismissing the case, Magistrate Gesora said that the nature of sport betting, winnings are unpredictable and a player cannot be certain the amount that he will win.
“That being the situation, it is not sound to argue that certain amounts should not be collected by withholding tax agents. Revenue collection is well regulated by statute, and by the fact Sportpesa is a tax agent is a clear indicator that all those using its platform are obligated to pay tax on their winnings,” Gesora ruled.
He added that the KRA commissioner of Domestic Taxes is mandated to collect taxes from sport betting firms and rent the same to the sports, art and social development fund as set out under income Tax Act.
Irungu had obtained court orders restraining Sportpesa from making any withholding tax deductions on any person’s winning from a bet.
Aggrieved by the order stopping Sportpesa from deducting withholding tax on winnings from betting , KRA sought to be enjoined as an interested party while seeking to set aside the earlier orders.
The taxman obtained orders setting aside orders obtained by Irungu issued by Milimani Commercial Senior Resident D. Kivuti.
The orders had temporarily stopped the operations of crucial Income Tax effectively rendering KRA unable to collect taxes amounting to Kshs. 2.7 million per months.