In the recent intensification of the conflict between the companies and the tax authorities, the Kenya Revenue Authority (KRA) has requested the Betting Control and Licensing Board (BCLB) to suspend the trading licenses and paybill numbers of SportPesa and Finix Casino.
The KRA communicated this request to the BCLB on November 8, mere weeks after the High Court in Kakamega instructed the companies not to deduct the 12.5 percent tax on betting stakes. The KRA specifically calls for the suspension of SportPesa's license.
The court’s decision provided punters on the SportPesa and Finix Casino platforms with temporary relief, but it also put the two companies on a collision course with the taxman.
Did you read this?
The KRA claims it has challenged the Kakamega High Court order, and that additional orders have been issued requiring the companies to make provisions for the excise tax for August.
“Both taxpayers have not complied to the court order despite our reminders dated September 29, 2023,” Weldon Ngeno, Commissioner for Domestic Taxes, said in the letter to BCLB’s chairperson Jane Makau.
“We hereby request you to kindly but urgently suspend all trading licences and pay bill numbers for SportPesa and Finix Casino until further notice.”
Despite the KRA's request, the Betting Control and Licensing Board (BCLB) has yet to enforce the suspension of licenses, allowing punters to persist in depositing funds into their accounts using the paybill numbers associated with SportPesa and Finix Casino.
SportPesa previously withdrew from the Kenyan market in October 2019, engaging in an extended legal dispute with the KRA over alleged unpaid taxes. The company cited an unjust tax regime as a contributing factor. However, SportPesa made a comeback in 2020 when Milestone Games Limited acquired the SportPesa brand name from Pevans East Africa, the original pioneer of sports betting in the country.
Finix Casino is another gaming company that received a High Court ruling in August, instructing them to cease deducting 12.5 percent from punters' betting stakes on their platforms.
The 12.5 percent excise tax translates to Sh12.50 for every Sh100 wagered, with the KRA collecting this amount. Additionally, there is a 20% withholding tax imposed on all winning bet slips.
