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Betting bait.

A punter’s stake was recently subjected to 20% tax on winnings, for which Kenya Revenue Authority ( KRA) suffered a blow when it was ruled by tribunal that that should be brought to an end. The tax Appeals Tribunal sitting in Nairobi ruled that the 20 percent tax should be charged on the positive difference between the payout made and the stakes placed in a given month. Kenya Revenue Authority has been demanding billions of shillings from betting firms based on the gross amount of the the payout to the punters, including the staked amount. The tribunal also placed a greater responsibility for payment of the tax on the punters, partially shielding the betting for!s from prosecution and aggressive pursuit of the 20 percent withholding tax.

The tribunal’s verdict now looks set to tilt the ongoing tax dispute between Kenya Revenue Authority and more than 20 betting firms including Sportpesa and Betin Kenya which have been denied operating linceces for the year starting July. Kenya Revenue Authority has been demanding Sh 61 Billion form the betting for!s for period between May 201 4and March 2019. Sportpesa on September 27 announced it was halting operations due to a drastic hike in taxed on betting stakes and the unresolved disputes with the Kenya Revenue Authority. Betin Kenya also ceased its operations, citing the heavy taxation as Tue main reason.

The Treasury last year reintroduced the 20 per cent tax on winnings, and amended the definition of winnings to include the stakes, sparking the dispute with the betting firms.
The earlier law provided for the 20 percent tax be charged on net winnings, which is arrived at by deducting the amount staked by the punter. But this was revised to include gross winnings. “The definition removed the provision for deduction of amounts staked. This amendment was effective 1st July, 2018,” KRA said in documents filed in Parliament.
The betting firms are relying on a previous definition prior to the Finance Act 2018 and interpret winnings as “the positive difference between the payout made and stakes placed in a given month, for each player.”

Using the same example, a player who bets Sh1,000 and wins Sh100 would pay withholding tax of 20 percent of the Sh100 winning. The player would leave with Sh1, 080, which includes his Sh1, 000 original stake and Sh80 winnings. KRA on the other hand has interpreted winnings as the gross amount of the payout to the punters, including the staked amount.
winnings, and amended the definition of winnings to include the stakes, sparking the dispute with the betting firms.
The earlier law provided for the 20 percent tax be charged on net winnings, which is arrived at by deducting the amount staked by the punter. But this was revised to include gross winnings. “The definition removed the provision for deduction of amounts staked. This amendment was effective 1st July, 2018,” KRA said in documents filed in Parliament.

By skwctgme

WEB DESIGNER
ASPHALT GAMES RACER
YOU TUBER
Business With Information Technology.

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