This archive report was first published on 12 August 2019.
On August 12, 2019, the Kenya Revenue Authority (KRA) directive took effect, requiring betting firms to withhold 20 percent of customer winnings.
Betika, a leading betting firm, has started deducting 20 percent on customer winnings in compliance with the directive.
The move comes after the High Court in Nanyuki ruled in favor of the KRA, stating that taxing winnings was not unconstitutional.
Earlier, a court order had suspended enforcement of tax in a dispute between the KRA and betting firms over the definition of a bet winning.
George Lesaloi Selelo filed the Nanyuki case in October 2018, including Betway, Pevans EA Limited (SportPesa), and Acumen Communication Limited as interested parties.
There are ongoing petitions challenging the tax and the definition of winnings, with Betika stating it has no option but to deduct 20 percent on gross winnings pending the outcome.
As a result, Betika will withhold a fifth of the sums on every winning bet.
This move follows Betlion, registered as MauUgan Enterprises Limited, which made a similar deduction earlier.
Previously, betting firms were expected to withhold 20 percent of the positive difference between winnings and the amount staked.
However, the current law demands the firms withhold 20 percent of every winning bet.
The KRA is seeking Sh61 billion in withholding tax from the betting firms, with Sh5.29 billion from Betin Kenya and Sh3.29 billion from SportPesa.
