SportPesa has again indicated that it has re-applied for the renewal of their operating license in Kenya months after it exited the sector citing frustrations from the government through the taxman KRA.
SportPesa was one of 27 betting operators whose licenses were suspended by the BCLB due to allegations of unpaid taxes. The dispute centered on the government’s view that the 20% tax on punters’ winnings included the stakes returned to the punter – effectively making it a tax on betting turnover – while operators held that the tax applied only to actual winnings.
The suspended licensees had their digital payment channels suspended on the government’s order, and while some legislators offered their support, the government proved unwilling to budge. In late August, Betway announced that its Kenyan license had been reinstated after agreeing to implement the government’s view of the 20% tax.
In early September last year, the Betting firm was cleared by the Kenya Revenue Authority making it viable to reacquire its license.
Once it acquires its license, SportPesa will join 10 other companies which were cleared in July. These include Betway, Mozzart Bet, Odi Bets, Eastleigh Bet, Lucky to you, Ken bookmakers, Bet boss, Kick off, Easi bet and Palms bet.
KRA in June last year demanded Sh8.59 billion from Safaricom as withholding tax arrears due from SportPesa and Betin Kenya, in a crackdown of the Sh200 billion sector. KRA was demanding 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.
In an earlier interview, Mr Karauri said that “all pending issues had been settled” and a deal reached which should see the firm get back to business as soon as BCLB clears it. “We have held talks with KRA and they have allowed us to get back to business,” said Mr Karauri then. Sports betting companies’ combined revenue hit Sh204 billion last year.
According to SportPesa records, it paid Sh400 million last year as withholding tax on winnings. This was in addition to Sh3.6 billion betting tax, Sh1.12 billion corporate tax, Sh722.9 million withholding tax, Sh183.4 million withholding value-added tax and Sh269.6 million pay-as-you-earn for its 367 employees. This amounted to Sh6.29 billion in taxes up from Sh3.63 billion paid in 2017.