By Galgallo Fayo, gfayo@ke.nationmedia.com
0
0
In Summary
- Justice David Majanja stopped the tax which came into effect on January 1, following enactment of the Finance Act.
- KRA last month said that all winnings would be considered as income, taxable at the rate of 20 per cent of the worth of the windfall.
- The first payment of the taxman by the gaming and betting companies was due Wednesday and subsequently the 20th of every month.
Betting houses have won a reprieve from the High
Court stopping Kenya Revenue Authority from levying a 20 per cent
withholding tax on winnings pending determination of a suit challenging
the charges.
Justice David Majanja stopped the tax which came into effect on January 1, following enactment of the Finance Act.
Justice David Majanja stopped the tax which came into effect on January 1, following enactment of the Finance Act.
This prompted 41 operators of gaming and betting
shops to move to court arguing that they were not consulted before the
law was passed.
“Pending the hearing and determination of this
petition inter parties, this court be pleased to grant a conservatory
order by way of a temporary injunction restraining KRA from levying 20
per cent withholding tax on winnings from gaming and betting as defined
in the Finance Act, 2013,” reads Justice Majanja’s orders.
KRA last month said that all winnings would be
considered as income, taxable at the rate of 20 per cent of the worth of
the windfall.
The first payment of the taxman by the gaming and
betting companies was due Thursday and subsequently the 20th of every
month. The case will be heard on February 27.
The petitioners list the Attorney-General, Principal Secretary Ministry of Finance and KRA as respondents.
The firms also list Commission on Revenue
Allocation; and Betting, Control and Licensing Board (BCLB) as
interested parties. The betting and gaming firms argue that it is
impossible to collect the tax from players due to varying player habits.
Taxed twice
Under the Fourth Schedule of the Constitution
betting falls both under the national and county governments. The
petitioners say there is a risk of them being taxed twice.
The firms further argue that the tax will lock out
tourists who participate in gambling since such short time visitors
lack details such as personal identity, a requirement before
participating in gaming activities.
They also fear that the new tax will lead to the
mushrooming of illegal betting and gaming establishments which they say
can lead to registered casinos closing shop.
Following the announcement last month, sponsors of
promotions indicated that they would stop offering material prizes for
fear that winners might not afford the withholding tax.
That the tax was back-dated to January 1, 2014
also presented a logistical nightmare for gaming promoters to trace past
winners and remit the taxes.
Kenya’s gambling business is regulated by the
Betting Control and Licensing Board (BCLB), which issues firms with
permits to run public lotteries and validates the selection of winners
in competitions.
No comments :
Post a Comment