This archive report was first published on 8 November 2019.
On November 7, 2019, the Tax Appeals Tribunal made a landmark ruling in favor of Sportpesa and Betin, two prominent betting companies in Kenya.
The ruling, which was reported by The Star, stated that the 20% withholding tax should be applied to net winnings, not total winnings.
This decision comes after a long-standing dispute between the betting companies and the Kenya Revenue Authority (KRA) over the taxation of betting payouts.
Earlier, the Treasury had sought to tax the stake of betting companies, rather than the payout after winning, which led to disagreements over the definition of the term 'winnings'.
The betting companies calculated winnings as the positive difference between the payout and stake placed in a month, while the tax authority posited that the term represented the gross amount of payout, including the stake.
As a result of the earlier ruling by the high court, betting companies faced a harsh operating environment, leading to the exit of major players like Sportpesa and Betin.
