This archive report was first published on 5 August 2019.
On August 5, 2019, the Kenya Revenue Authority (KRA) found itself at the center of a controversy after freezing bank accounts belonging to major betting firms, despite a court order allowing them to continue operating.
The firms, including SportPesa and Betin, had informed Parliament the previous week that the KRA had disregarded the court order and the law by pushing for the withdrawal of their licenses and a freeze of their bank accounts.
As per a High Court order issued earlier, the Betting Control and Licensing Board (BCLB) and other agents were barred from stopping the betting firms from operating after June 30.
"Despite a High Court order against the KRA, various agency notices have been issued by the KRA against the company freezing their bank accounts," Betin Kenya told the Senate Committee on Justice, Legal and Human Rights.
"The KRA has proceeded to notify the BCLB that the company is non-compliant and should not have its licenses renewed," the company added.
On July 10, the BCLB had ordered telecoms firms to stop processing payments for sports betting companies, effectively grounding their operations.
The regulator cited that 27 betting firms had yet to meet undisclosed licensing requirements.
The firms argued that withholding a license was not a legally recognized measure of resolving a tax issue.
"It is illegal for the KRA to stop our business operations pending determination of the amount of tax payable… It is a measure not recognized in the Tax Procedures Act, the guiding statute for tax administration," SportPesa told the Senate.
The dispute between the KRA and the betting firms centered on the amount and responsibility of the gambling firms in collecting 20 per cent of winnings on behalf of the taxman.
Senators had censured the State for defying court orders, with the committee chair, Samson Cheragei, stating, "We want them to tell us why they have decided to treat court orders as tissue paper," during a previous hearing.
Responding to the controversy, the KRA stated that it was in talks with the betting firms and that the matter was before the court.
