SportPesa fiscal dispute over €120 million in Kenya

SportPesa fiscal dispute
SportPesa fiscal dispute

SportPesa fiscal dispute started since the Kenyan Revenue Authority has claimed the company owes millions of dollars to the country.

In 2018, the KRA filed a complaint against Pevans East Africa, SportPesa Kenya’s holding company, claiming payment of 10,3 billion Kenyan Shillings (KSH), equivalent to 80 million Euros, and accusing the bookmaker of not paying taxes between 2015 and 2018.

Originally, the KRA stated that SportPesa had violated Kenya’s Corporate Income Tax Code, by not paying “a 20% retention tax concerning the profits of its clients”.

Last week, KRA employees added a penalty to the bill, raising it to a total of KSh14,9 billion (€128 million).

After this, the KRA said the company had 14 days either to pay or to protest the decision. In case the bookie does neither, additional penalties will be added.

SportPesa fiscal dispute position

Right from the start, SportPesa rejected the above-mentioned claims – saying that the Magistrate Court had given the company the possibility of not paying those taxes after a client filed a complaint in 2014.

Besides, SportPesa states that, after a fiscal revision, the Kenyan government “froze” such tax back in 2016, which was initially conceived as a 35% fee but ended up being revoked.

Pevans East Africa Limited argued that the KRA disrespected a court order that intended to concede fiscal benefits to the company.

SportPesa highlights a 2014 court order, which declared that the profits of its clients should not be subjected to taxation.

Sports betting – advertising restrictions

In any case, SportPesa is currently adapting itself to the Kenyan market, while the local government wishes to impose more severe restrictions on gambling advertising, in order to protect its citizens.

In the first days of May, Liti Wambua, the interim director of Kenya’s Betting Control Board, confirmed that, from May 30 onwards, the board will adopt new restrictions on gambling advertising, with the intention of “protecting the general public”.

On a short declaration, Kenya’s Betting Control Board said that “gambling advertising would be prohibited between 6 a.m. and 10 p.m.”

Therefore, neither media channels nor public celebrities will be able to endorse gambling and betting sites activities publicly.

The parties involved have highlighted the government’s desire to “protect the Kenyan citizens” and to improve the quality of gambling advertising.

However, it has also been stated that the measures adopted are “vague” and that its legal dispositions must be clarified.

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