Taxman speaks as Gor fans condemn KRA’s Sh118m tax demand on club

By GILBERT WANDERA

Gor Mahia fans during their KPL match against KCB at City Stadium. [PHOTO: DENNIS OKEYO]

Kenya Revenue Authority (KRA) has explained why it slapped a Sh118 million income demand note on Gor Mahia.

This happened even as fans took on social media to condemn the move as unfair.

In a statement sent to FeverPitch, Ezekiel Maru, the acting Deputy Commissioner Marketing and  Communication the club among others has been identified as a non-compliant tax payer.

“KRA as part of its revenue enhancement initiatives, selects based on risk profiling focus areas/groups for compliance checks. In the first quarter of the current financial year, one of the focus groups was football clubs.

“A number of football clubs were found not to be filing returns or paying relevant taxes. We identified Gor Mahia among others as a non-compliant tax payer in the football clubs focus group,” he said.

He explained that after they identified Gor Mahia, they wrote to the club on the intention to carry out a compliance check which was served on them last August.

AVAIL RECORDS

“The letter required that Gor Mahia avail  records to facilitate a compliance check. No records were availed and neither did officials respond to our request for a meeting to discuss the matter.”

“Estimated assessments were, therefore, issued in accordance with section 73(3) of the Income Tax Act.

“Gor Mahia wrote to object to the assessments but the letter was not accompanied by records or returns as required by law. No payments have been made to date either,” said the official.

He added: “We wish to clarify that Gor Mahia is not the only club under compliance monitoring. As a matter of fact some clubs have already made payment while others are still under check.

COLLECT TAXES

“We fully appreciate the honor sportspersons and artist bring to the country. However, as the law stands today, KRA is required to collect taxes on all incomes earned by sportspersons including football clubs.”

The matter stirred a huge debate on social media. Jim Ranyondo posted on face book: “Associations and welfare groups are exempt from taxation. The reason being that they are not profiteering entities. They audit their accounts for transparency’s sake. Thus it is shocking to hear that KRA is demanding for Sh118million from Gor Mahia. Is someone fighting Gor Mahia and why,?”

Another fan Caleb Muhideen wondered: “Sh118m tax? A community sponsored club? How and why?

Some however, resorted to humor. Moses Balah posted: “Gor Mahia is the ‘government’ so there is no worry. This thing will be swept under the carpet. They are just jealous because Gor Mahia beat Thika United.”

Gor executive discussed the matter during their meeting on Tuesday and resolved to seek advice from tax experts before confronting KRA with their version. —[e-mail]