Senate accuses KRA of breaking law in gaming industry tax matter

The taxman is demanding Sh61 billion from at least 27 betting firms in taxes before their operations can be stored amid protests that the State was acting against a court ruling.

Kenya Revenue Authority (KRA) on Wednesday told Senators that there has been non-compliance by the firms in remitting withholding taxes to the government.

Commissioner Elizabeth Meyo said out of the 72 registered betting firms, only 27 had not complied while 7 others have agreed with the agency on payment plans for the disputed tax.

But KRA, Betting Control and Licensing Board (BCLB) and Interior Cabinet Secretary Fred Matiang’i came under sharp criticism from the Senate Committee on Justice, Legal and Human Rights for acting against court orders.

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The committee chaired by Samson Cheragei (Nandi) said it reeks of impunity for the regulator to suspend operations of the companies as well as deport some of their directors when the matter was pending before the High Court.

Consequently, the team has summoned Interior CS Fred Matiangí and the regulator to appear before it this morning.

“CS Interior must appear here tomorrow alongside the Betting and Control Board. If we start treating court orders as tissue papers, we will end up with a country that does not obey the rule of law,” said the chairman.

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The High Court had granted interim orders restraining the regulator from interfering with business operations or stopping the firms from continuing to trade.

Nakuru Senator Susan Kihika accused the Interior Ministry of acting in total disregard to the rule of law after Gamcode Ltd (trading as Betin) told the committee that its directors Leondro Giovando, Demonico Giovando were deported by the Immigration Department despite holding valid work permits.

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“People were deported when their issues were still in court. It is a similar case with the deportation of lawyer Miguna Miguna even after the court had made a ruling in his favour. If this is not impunity then I have no other word to call it,” said Kihika.

Meru Senator Mithika Linturi said there was “public anger” on how the State has decided to mistreat their people.

KRA, however, defended its position to enforce compliance, stating that the law requires the betting companies to act as Withholding Agents for KRA to withhold and remit the taxes withheld to the government.

“Raised assessments based on the data obtained from Betting, Control and Licensing Board (BCLB), total amount so far established and demanded is Sh61 billion,” said the commissioner.

She said the agency has been engaging the industry in a bid to arrive at an acceptable payment plan on a case by case basis.

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“The majority of the firms have come forward and made acceptable payment arrangements and commitment to comply with the law moving forward. We are still engaging the remaining few with a view to agree on an acceptable payment plan and commitment to comply with the laws moving forward,” she added.

But SportPesa through its chief officer Ronald Karauri told the committee that KRA acted in bad faith by asking the regulator to withhold its license over the tax dispute.

 “It is our view that, the courts and the Tribunal having rightfully seized of the matters, should be allowed to resolve the issues expeditiously and that the Regulator and KRA should not continue to abuse their powers to intimidate the business,” said Karauri.

He said that despite existence of Court orders, KRA has repeatedly issued agency notices to network providers to shut down their paybill accounts.

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Kenya Revenue Authority(KRABetting Firms