Pevans East Africa Limited, the company that owns betting firm Sportpesa, is on the spot for failing to remit taxes amounting to Ksh14.9 billion to the Kenya Revenue Authority (KRA).
KRA accuses Sportpesa of failing to withhold 20 percent tax from winnings, as per the stipulations of the Income Tax Act.
The firm should have withheld and remitted Ksh12 billion from the Ksh60 billion paid out to betting winners, but never did so. The amount has shot up to Ksh14.9 billion given payment penalty and interest accrued.
However, the firm says that there is a court order barring it from collecting such monies from the winners.
However, the court order dates back to 2014.
Recently, on March 29, a court directive allowed the KRA to demand winning tax from the betting firms.
On April 11, the court overturned the directive, temporarily stopping gambling and lottery firms from deducting 20 percent tax on winnings.
KRA had asked the court to stop the order, arguing it will freeze collections of about Ksh2.7 billion monthly from winners, the tax which is deducted and withheld by betting and lottery firms.
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Sportpesa is partly owned and managed by Ronald Karauri, who was recently linked to tax evasion for Nairobi County.
Karauri, Nairobi Senator Johnson Sakaja and James Omondi linked to Seven Star Media Limited, which has arrears amounting to Ksh40 million.
KRA gave SportPesa a 14-day ultimatum to respond or pay, failure to which further punitive action will be taken against it.
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