Inside Politics

KRA clears Sportpesa over tax evasion

Tuesday, September 3rd, 2019 20:05 |

By Noel Wandera

Betting firm, SportPesa has been cleared by the Kenya Revenue Authority (KRA) to resume its operations in Kenya.

In a statement to newsrooms, SportPesa said it has been engaging the regulators – Betting and License Control board and Kenya Revenue Authority – and the government targeted towards creating a better understanding of the gaming industry with a view to creating a shared perspective on related regulation including tax administration.

“There has been notable progress in these sessions and we are pleased that Kenya Revenue Authority has now cleared us to have our license renewed,” read the statement.

The betting firm reaffirmed their commitment to support the government’s economic development agenda by operating as a law abiding business committed to tax compliance.

In July this year, the Government suspended SportPesa’s operating license, over a Sh14.9B in tax arrears. In its demand note, KRA claimed Pevans East Africa Limited failed to comply with the Income Tax Act that provides for taxation from betting.

The company further faced charges of failing to withhold tax from benefactors. Of Sh60billion paid out to betting winners, KRA said the firms would have withheld and remitted Sh12 billion, an amount that shot up to Sh14.9 billion given the payment penalty and interest accrued.

The KRA and BLCB crackdown affected 27 companies whose licenses were also cancelled following negative findings of BCLB that they were not tax-compliant with some failing to renew their licenses by the July 1 deadline.

In their altercation with authorities, the Giant gaming firm threatened to shut down its operations in Kenya, if the looming stand-off with the government over taxation rated issues was not resolved, with the firm’s Global CEO Gerasim Nikolov explaining that the firm could no longer operate profitably under the current taxation regime.

The giant gaming firm went ahead to cancel all sponsorships ahead of Premier League kickoff, worth an estimated Sh1 billion, including a lucrative Sh450 million with KPL sponsorship for Gor Mahia and their arch rivals AFC Leopards in deals worth Sh120 million each year. Ends

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