6969 lottery firm’s tussle with taxman back in court

Corporate News

One of the cars that was to be won in the 6969 lottery. The battle between the taxman and promoters of the Shinda Smart 6969 lottery over some Sh139.1 million being held by Safaricom has returned to the High Court, weeks after the revenue authority lost the case. Photo/FILE 

By GALGALLO FAYO

In Summary

• Kenya Revenue Authority (KRA) has moved back to the High Court and stopped Flint East Africa Ltd and Interactive Gaming and Lotteries Ltd from accessing the cash, arguing that it plans to appeal against the ruling and if the cash is released its application would be rendered irrelevant.
• KRA has appealed against the judgment, saying the agency stands to suffer substantial loss of income.

The battle between the taxman and promoters of the Shinda Smart 6969 lottery over some Sh139.1 million being held by Safaricom has returned to the High Court, weeks after the revenue authority lost the case.

Kenya Revenue Authority (KRA) has moved back to the High Court and stopped Flint East Africa Ltd and Interactive Gaming and Lotteries Ltd from accessing the cash, arguing that it plans to appeal against the ruling and if the cash is released its application would be rendered irrelevant.

KRA had slapped Flint East Africa Ltd with a tax demand notice for custom and import taxes related to the procurement of the software used to run the mobile-based lottery, but the High Court on April 30 declined to uphold the taxman’s claim.

Interactive Gaming and Lotteries Ltd have, however, filed another application accusing KRA of procuring orders stopping the enforcement of the judgment through non-disclosure of facts.

“The third defendant (KRA) misled the court (by stating that) if the order (stopping release of the money) is not granted it would suffer substantial loss and be highly prejudiced …, knowing very well that was not true,” says Interactive in its document.

The company claims that since it has not even extracted the decree, there is nothing to be enforced and termed the order obtained by KRA as a fraud on the court process.

“Accordingly the subject orders should be discharged forthwith and the entire application,” struck out, says Adil Bashir, director of Interactive Gaming and Lotteries Ltd.

KRA anchored its claim on Flint’s Sh350 million imported software. Kenneth Agolla, an investigation and enforcement officer at KRA, told the court that Flint had failed to pay the requisite customs duty at the rate of 25 per cent (Sh82.4 million) and import duty of Sh93.3 million.

But the court established that the taxman had indeed cleared Flint East Africa with a tax compliance certificate, invalidating KRA’s claim of tax evasion.

Justice Odunga had directed Safaricom to release the money to the lottery firms, noting that he was unable to find exactly how much, if any, is due to KRA from Flint in respect of unpaid taxes.

READ: 6969 lottery firm wins Sh175.7m tax battle with KRA

KRA, dissatisfied with the ruling, returned to court to suspend the judgment.

KRA has appealed against the judgment, saying the agency stands to suffer substantial loss of income.

Documents filed in court show that more than 2.1 million text messages were sent to the mobile lottery by end of the competition, highlighting the lucrative nature of Kenya’s lotto industry.