Betika starts 20pc tax cut on customer winnings

Betting firm Betika has started deducting 20 percent on customer winnings in compliance with a Kenya Revenue Authority (KRA) directive.

The firm informed customers of the move last week, coming before the High Court in Nanyuki ruled last Thursday in favour of the KRA that taxing winnings was not unconstitutional.

A court order had in April suspended enforcement of tax in a dispute between the KRA and betting firms on the definition of a bet winning.

George Lesaloi Selelo filed the Nanyuki case last October and included Betway, Pevans EA Limited (SportPesa) and Acumen Communication Limited as interested parties.

There are other separate petitions including one at the Tax Appeals Tribunal challenging the tax and the definition of winnings, with Betika saying it “has no option but to deduct 20 percent on gross winnings” pending their outcome.

Consequently, it will withhold a fifth of the sums on every winning bet.

Betika is the latest firm to deduct the levy on customer winnings after Betlion, registered as MauUgan Enterprises Limited, made a similar earlier.

Previously, the betting firms were expected to withhold 20 percent of the positive difference between winnings and the amount staked. But the current law demands the firms withhold 20 percent of every winning bet.

The KRA is seeking Sh61 billion in withholding tax from the betting firms — Sh5.29 billion from Betin Kenya and Sh3.29 billion from SportPesa leading to the suspension of their licences.

“The betting companies and the KRA are in discussions to resolving the dispute,” KRA earlier said in a statement.