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The Tax Appeals Tribunal has ordered Betway Kenya to pay taxes amounting to Sh158 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 Sh158 million.
Betway Kenya wanted to stop KRA from demanding additional Withholding Tax on winnings derived from bets placed by punters and Pay-As-You-Earn (PAYE) on the earnings of one of its employee 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 Sh9.95 million, capital costs relating to research and processing costs of Sh16.5 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.