Sportpesa, Betin win bid to reduce tax on bet prizes

A tribunal ruled in favor of the betting companies.

In Summary

• The Tribunal has ruled that the 20" withholding tax should be based on net winnings and not gross.

sportpesa CEO Ronald Karauri
sportpesa CEO Ronald Karauri
Image: Courtesy

Online betting companies have won a bid to stop KRA over taxation on betting prizes.

KRA has been demanding billions of shillings from betting firms based on the  tax charged on the punters winning prize.

A tribunal ruled in favor of the betting companies including Sportspesa and Betin partially blocking the  pursuit of the 20 percentage withholding tax.

The Tax Appeals Tribunal of betting firms has ruled that the 20% withholding tax should be based on net winnings and not gross.

The dispute was due to a law introduced by the Treasury on winnings including stakes of the punters, business Daily reported.

The Earlier law provided for 20% tax on the net winnings which would be arrived at by deducting from the punter's staked amount.

This was however revised to include gross winnings .

The Betting companies interpret winnings as “ the positive difference between the payout made and stakes placed in a month”.

KRA  on the other hand interpreted winnings as the gross amount of the payout including the staked amount