SportPesa under fire as KRA demands Ksh.14.9B in tax arrears

KRA is in a vicious protracted court tussle with SportPesa over billions of shillings in tax arrears.

The taxman is demanding a whopping Ksh.14.9billion from the betting firm.In its demand note, KRA claims Pevans East Africa Limited failed to comply with the Income Tax Act that provides for taxation from betting.

The company is facing a further charge of failing to withhold tax from benefactors.

Out of Ksh.60billion paid out to betting winners, KRA says the firms would have withheld and remitted Ksh.12billion; an amount that shot up to Ksh.14.9billion given payment penalty and interest accrued.

In a rebuttal, Pevans East Africa Limited claims KRA has acted in contempt of a court order barring it from collecting such monies from the firm.

SportPesa sought refuge in a 2014 court order where it was sued and barred from making any deductions from any person’s winnings.

SportPesa is accusing KRA of bullying them with threats and intimidation on account of attracting penalties.

The betting firm further claims it succumbed to the taxman’s pressure parting with Ksh.50million for fear of adverse action on their business.

The Ronald Karauri-led company is not new to controversy.

Karauri, Nairobi Senator Johnson Sakaja and James Omondi linked to Seven Star Media Limited, are also said to have arrears amounting to Ksh.40million.

The debt is owed to Nairobi County as rates having accumulated over six years.

KRA gave SportPesa a 14-day ultimatum to respond or pay, failure to which further punitive action will be slapped on the betting firm.