The Kenya Revenue Authority has filed a notice of appeal challenging a ruling by Tax Appeals Tribunal (TAT) that suspended the deduction of 20 per cent withholding tax from gamers winnings.
Last week, TAT ruled in favor of the betting companies such as Sportspesa and Betin, stating that the 20% withholding tax should be based on net winnings and not gross.
But the taxman, in a statement on Monday, indicated that it has commenced the appeal process by filing a notice of appeal on November 8.
“KRA disagrees with TAT’s decision for among other reasons, the fact that it departed from the decision by Justice Hatari Waweru’s in a Meru High Court Case in which the Learned Judge had found that there was no ambiguity in the interpretation of the term “winnings” as defined by the Income Tax Act. In arriving at its the decision, the TAT found that Justice Hatari Waweru’s decision was inapplicable hence not binding on it because it had not delved into the definition of the term “winnings”,” said KRA’S Legal boss Paul Matuku.
According to KRA, the tribunal’s finding had no legal backing in demanding withholding Tax from the Betting Firms and the manner in which it had enforced collection of the tax.
Betting firms had begun deducting 20 per cent withholding tax from their customers’ winnings in compliance with directives from the Betting Licensing and Control Board and the Kenya Revenue Authority. This despite an April 2019 court order that barred the firms from deducting and remitting the money to KRA, until this particular case was heard and determined.