The Kenya Revenue Authority (KRA) has today suffered a blow after a tribunal ruled that a punter’s stake in a bet cannot be charged the 20 percent tax on winnings.
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 stakes placed in a given month.
The ruling will indeed entice SportPesa and Betin to launch their operations back in the country. The betting giant operates in Tanzania where tax is only charged on the profit from winnings and not the total payout.
KRA has been demanding billions of shillings from betting firms based on the gross amount of 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 firms 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 KRA and more than 20 betting firm— including SportPesa and Betin Kenya—which have been denied operating licences for the year starting July. KRA has been demanding Sh61 billion from the betting firms for the period between May 2014 and March 2019.
SportPesa on September 27 announced it was halting operations due to a drastic hike in taxes on betting stakes and the unresolved disputes with KRA. Betin Kenya also ceased its operations, citing the heavy taxation as the 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.
Using this interpretation, a player who bets Sh1, 000 and wins Sh100 would pay a tax of Sh220 and leave with Sh880. As such, despite winning, the punter would have lost Sh120.
The tribunal Thursday ruled that the 20 percent withholding tax should be based on net winnings.
The betting and gaming companies were expected to withhold a fifth of the sums won by punters to be remitted to the taxman — piling an additional tax burden on an industry that is already paying 15 percent of gross earnings to the Exchequer. KRA has been demanding Sh8.59 billion from Safaricom as withholding tax arrears due from two major betting firms — SportPesa and Betin Kenya — in a fresh row pitting the State agency against the betting industry.
The taxman earlier wrote to Safaricom declaring the telecommunications firm a withholding tax collecting agent for SportPesa and Betin and demanded immediate payment of the sum.
KRA demanded that Safaricom pays Sh5.29 billion withholding tax arrears due from Gamcode Limited, trading as Betin, and a further Sh3.29 billion due from Pevans East Africa, which trades as SportPesa.
The gaming companies largely relied on Safaricom’s network to take bets, communicate with users and process payments through paybills.
The government in July ordered Safaricom to stop processing payments for sports betting companies, effectively grounding their operations.
Online sports betting companies such as SportPesa grew rapidly, riding a wave of enthusiasm for sports to achieve combined revenue of Sh204 billion shillings last year.
However, that has sparked concern in the government about the social impact of betting. In May, the country introduced new gambling regulations, including banning advertising outdoors and on social media. High Court referred the dispute over tax on winnings to the Tribunal after SportPesa sued KRA in a suit that saw other betting firms including Betin get enjoined.
Even though the two companies closed shop, there are more than 30 other legal betting companies which are operating within the confines of the law. Even world’s giant betting firm Betway reopened shop after renewal of their license months ago. People are still able to stake and win big. Others such as Betika and Odibets have even introduced bonuses to wins to cover the 20% withholding tax.
Betika and BetLion have also introduced a SportPesa Mega Jackpot lookalike which runs each weekend giving a chance to punters to wreck into their pockets up to 350 million shillings if they correctly predict all the matches listed.
This week’s Betika Grand Jackpot worth 100 million shillings is already listed. Should you be interested in earning atleast a bonus, Sahihi Bet, a tipstar platform can easily provide you with a combination if you follow the below procedure.
There are four ways of working with Sahihi Bet.
Subscribe to Plans
The tips platform offers 3 plans that assures subscribers of daily wins. Namely; Daily plan offering 10 to 15 sure odds at a one-off price of 250 shillings. Weekly plan running for 7 days with an assured winning rate of 5/7 days. Set at a fee of 1000 shillings, the plan also includes the weekend Jackpot and Grand Jackpot combinations.
The third plan; Monthly based comes at a cost of 3,500 shillings. It assures you of 15 odds each day, a weekly running bet of 50 odds, Jackpot predictions for two sites and an additional 5 odds additional slip each day.
One can also subscribe for a 3 month period at 9,000 shillings and 6 month period at 16,200 shillings. Immediately upon subscription to a plan, individuals are added to a Telegram channel.
Here, winning slips are posted on a fixed time intervals of every 3 hours. They also get the slips via SMS each day and are advised on how much they should stake each day.
Make your Payment via MPESA to 0792862269.
The Sahihi Bet rollover plan is a savings system of betting which ensures that you get a salary of 40,000 shillings each end month from your betting activities.
rom a Stake of 1000 shillings in day one, the experts move with you every day for 30 days to a profit of 40,000 shillings.
Under this plan, some get more than 100,000 shillings a month. The plan costs 4,000 shillings a month and 1,500 shillings a week.
Make your Payment via MPESA to 0792862269 and begin the journey to making 40,000 shillings each month.
Both Gordon Ogada and Samwel Abisai acknowledged to having used this strategy and ending up winning several multibets before landing the SportPesa Mega Jackpot. Sahihi Bet experts will manage your betting account in any platform for a specific period of time and make for you the required profit for the period as per your recommendations.
Interested in this? Pay a fee of 2,000 shillings for a week, Deposit 1,000 shillings in your account on either Betika or any other, surrender your login details to Sahihi Bet and wait for 10000 shillings as profit at the end of the week.
Account Management for a month costs 6,000 shillings and gives a profit of 40,000 to 50,000 shillings.
There are those who are not interested in betting daily. They only aim at winning millions presented weekly in Jackpots. Sahihi Bet offers 3 combinations for the Jackpots each week at a cost of 500 shillings for each site. It costs 1,500 shillings to get winning combinations for Jackpots in 4 betting sites in a week.
One can also order the Betika Daily Sababisha Jackpot which stands at 5 million by paying 500 shillings daily or 3,000 shillings monthly.
Make Payment via MPESA to 0792862269. You can also buy a one of running multibet slip of 100 odds winning percentage rate of 100% at 4,500 shillings. Reach out to us via 0758271865 either through SMS, Calls or on Telegram.
Kindly note that all Payments are made via MPESA to 0792862269 and not any other. Several of our readers have been conned by people who splash other forms of payment hence ending up not getting the service they pay for.
MAKE ALL PAYMENTS VIA MPESA TO 0792862269.
The above is non negotiable. You can join our general Telegram channel @SahihiBet for Free. Contact us via Telegram or sms/call 0758271865.