Provide clarity on betting winnings tax; KRA told

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The KPMG logo.
The KPMG logo. PHOTO/COURTESY

The Kenya Revenue Authority has been asked to provide clarity on how the 20 per cent tax on non-cash rewards from gambling will be collected.
According to KPMG East Africa, the lack of clarity on the matter may coerce winners into selling their non-cash rewards such as land, houses or cars in an effort to generate the 20 per cent excise.
Speaking to journalists at a press conference last week, KPMG Tax and Regulatory services Senior Manager Mr Stephen Waweru said that there is an issue with how practical the directive is.
“If the company running the promotion cannot include paying tax on your behalf as part of the package, then you have to sell the prize that you won to pay the tax or generate the tax money from elsewhere,” he said.
The revelation from the Consultancy firm comes days after Cosmas Korir, and aspiring politician won Ksh. 208 million in gaming firm Sportpesa’ mega-jackpot. There has been confusion surrounding the amount of money Mr. Korir is supposed to pay the revenue collector in taxes.
If the tax was to be enforced, Mr Korir would pay Ksh. 42 million in tax. However, SportPesa Head of Consumer Care Emily Gachuki last week insisted that Mr Korir is entitled to take all his winnings since the Kenya Revenue Authority (KRA) and the Betting Control and Licensing Board were yet to provide guidelines on the new 20 per cent tax.
Ms. Gachuki subsequently revealed that the betting firm was still waiting on the directive on the new tax adding that they cannot withhold tax without guidelines from the government.
The levy on winnings was initially set at 35 per cent in 2016 but it was dropped due to setbacks in its enactment. Following President Uhuru Kenyatta’s sanctioning of the Finance Bill 2018 into law in September, a 20 per cent tax on all winnings was introduced.

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