Betway slapped with £1m back-tax bill by Kenyan tribunal
Privately owned sports betting operator to dispute calculation pending a possible appeal
Betway has been ordered to pay KSH158m (£1.1m) in unpaid taxes to the Kenya Revenue Authority (KRA) by the country’s Tax Appeals Tribunal.
Betway’s Kenya division, trading as M/S BlueJay Limited, launched an appeal to stop the KRA from demanding withheld taxes on winnings from bets placed by Kenyan punters.
The KRA also requested an additional payment of tax on professional fees and PAYE taxes on the earnings of Betway Kenya employee John Felix Kittony, who the company is alleged to have retained as an independent consultant.
The tribunal found that Kittony served as an independent contractor for Betway Kenya for seven months between March and October 2016 during which time the firm was liable to pay taxes on professional fees paid to Kittony by Betway.
He later became an employee of the company when he was appointed as a director, at which point the company was liable to pay PAYE taxes yet this was never paid.
The tribunal found Betway had computed outstanding withholding taxes on Kenyan winnings on net winnings rather than gross winnings, contrary to section 34 of the Kenyan Finance Act 2016, taxes that were applicable for the duration of the tribunal review.
Betway has been ordered to pay withholding taxes on Kittony’s professional fees of KSH9.95m (£72,000), together with capital cost relating to research and processing of KSH16.5m (£119,000)
The operator has also been asked to pay withholding taxes based on Kenyan punters gross winnings of KSH131.7m (£953,000), inclusive of penalty and interest at the time of the assessment.
EGR understands that Betway is looking to challenge the ruling, believing that the calculation is not correct and then use its right to appeal if the challenge is unsuccessful.
The operator declined to comment pending this challenge.