KRA on the spot over betting firms accounts freeze

The Kenya Revenue Authority (KRA) has found itself in the firing line for triggering the freezing of bank accounts belonging to major betting firms despite a court order allowing them to continue operating.

The firms, including SportPesa and Betin, told Parliament last week that the KRA went against the court order and the law in pushing for the withdrawal of their licences and a freeze of their bank accounts.

The High Court had issued an order barring the betting regulator — the Betting Control and Licensing Board (BCLB) — and other agents from stopping the betting firms from operating after June 30.

“Despite a High Court order against the KRA, various agency notices have been issued by the KRA against the company freezing their bank accounts,” Betin Kenya told the Senate Committee on Justice, Legal and Human Rights.

“The KRA has proceeded to notify the BCLB that the company is non-compliant and should not have its licences renewed.”

The betting regulator on July 10 ordered telecoms firms to stop processing payments for sports betting companies, grounding their operations.

BCLB said 27 betting firms had yet to meet undisclosed licensing requirements.

The firms argued that withholding a licence is not a legally recognised measure of resolving a tax issue.

“It is illegal for the KRA to stop our business operations pending determination of the amount of tax payable… It is a measure not recognised in the Tax Procedures Act, the guiding statute for tax administration,” SportPesa told the Senate.

The dispute between the KRA and the betting firms centres on the amount and responsibility of the gambling firms in collecting 20 per cent of winnings on behalf of the taxman.

Senators last week censured the State for defying court orders. “We want them to tell us why they have decided to treat court orders as tissue paper,” said the chair of the committee Samson Cheragei.

The KRA in a Friday statement said it was in talks with the betting firms.

“This is a matter before court and we cannot comment on the merits of the same,” the KRA said in a response to the Business Daily.

“However, the betting companies and KRA are in discussions with a view to resolving the dispute. Once a resolution has been reached, the same will be recorded in court.”