Tribunal orders Betway to pay Sh158 million betting taxes

The Tax Appeals Tribunal has ordered Betway  Kenya to pay taxes amounting to Kshs.158 million to the Kenya Revenue Authority (KRA).

The  Tribunal  ruled  in  favour  of  KRA  in  a  case  in  which  the  international betting   firm,  M/S  BlueJay Limited,  trading  as  Betway  Kenya  objected  to payment of various tax obligations totalling Kshs.158 million.

Betway Kenya wanted to stop KRA from demanding additional Withholding Tax on winnings derived from bets placed by punters and Pay-As-Y ou-Earn (PAYE) on the earnings of one of its employee Mr. John Felix Kittony, who the company alleged to have retained as an Independent Consultant.

The Tribunal ordered the company to pay all the taxes it had agreed to pay in regard to Withholding Tax on professional fees. The taxes amounted to  Sh 9.95 million,  capital costs relating to research and processing costs of Sh 16.5 million and outstanding Withholding Tax based on gross winnings of Sh131.7 million, inclusive of penalty and interest as at the time of assessment.

The Tribunal held that the Company  had computed outstanding Withholding Tax  on  winnings  on  net winnings contrary  to Section 34  of the Finance Act, 2016 that was applicable for the duration under review.

On Withholding Tax on professional  fees, it observed that from 1st March 2016 to 12th  October 2016 a period of seven ((7) months, John Felix Kittony was an Independent  Contractor  (Consultant)  but  became  an  employee  immediately he was appointed Director, and the company was liable to withhold and remit PAYE from that time.