• Nakuru senator accuses KRA of being selective in the people it goes after.
• One of the directors denied entry to the country was 'born in the country and has massive investments here'.
Image: COURTESY
The Interior ministry's decision to outlaw certain betting firms was selective and in contempt of court, senators have said.
This followed reports before the Senate Justice and Legal committee on Wednesday that a Tax Appeals Tribunal allowed the betting firms to continue operating.
This was to hold until the entities resolved the tax row with the Kenya Revenue Authority and Betting Control and Licensing Board.
Betting firms and the taxman are embroiled in a dispute on how to compute tax, with the divergence being on whether to charge tax on gross or net winnings.
At the session that Matiang'i skipped, the lawmakers castigated his ministry for barring entry of some of the firms' directors despite holding valid passports.
The ministry suspended the entities’ operating licences and ordered telcos supporting their operations to close the associated payment accounts.
Shortcodes and paybill numbers used by the 27 affected firms were also suspended, with domain names and internet protocols shut down in other cases.
Senators Mutula Kilonzo Jr (Makueni), Mithika Linturi (Meru), Cleophas Malala (Kakamega) and Susan Kihika (Nakuru) questioned the manner in which the closure order was implemented.
Citing bias, the senators said the ministry is hiding under the tax question to punish the firms.
Linturi said it was regrettable that the ministry enforced the ban despite being served the order issued by the tax tribunal.
“When you look at the papers or documents presented before us, you will be left wondering whether this is a country where people operate outside the law,” he said.
Documents tabled before the committee led by Nandi Senator Samson Cherargei showed that the companies got an order dated June 28.
The ministry enforced the ban but a Leakey Wambua, who was also served, later wrote to Safaricom to stop services to betting firms.
Cherargei ordered Matiang'i to appear before the committee on Thursday to respond to the matters.
KRA deputy commissioner Elizabeth Meyo told the committee that the tax claims arose from concerns that 70 betting companies owe the state Sh61 billion in taxes.
She said only two firms have complied with tax requirements, with another 27 not meeting the minimum requirement to do betting business.
But SportPesa CEO Daniel Karauri accused the regulator (BLCB) of blatantly flouting court orders by issuing the directive to mobile network operators to shut down their paybill numbers.
Betin CEO William Mugambi said among the firms’ directors denied entry was Domenico Giovando, who was born in Kenya and has massive investments here.
“It is unfortunate that the action was taken without following due process and without according the company an opportunity to defend itself,” the official said.
Kihika said the basis of the problem is “a taxman which is selective of the people it goes after.”
“Is the ministry trying to legislate morality by closing some companies and leaving others? I believe there is an issue the ministry has with these firms. It should not be tucked in the tax debate,” the lawmaker said.
“Are we so arbitrary as a taxman that we don’t give companies due process to defend themselves before they are shut down?"
This was after Siaya Senator James Orengo explained that SportPesa’s problem was because of its display of flamboyance.
“The taxman, in cahoots with the government, is employing a deterrent measure. The government feels betting firms are turning the country into a casino economy; secondly, it is about your behaviour by conducting business as a company with a lot of money,” Orengo said.
Malala backed Kihika’s remarks, saying perception should not be used to antagonise companies.
“This experience has not been in the country for a long time. The taxman should not use the behaviour of a company or individual to impose a tax,” the lawmaker said.
Edited by R.Wamochie