KRA Asks Betting Board To Suspend SportPesa's Licence And Paybill Numbers Amid Tax Dispute

• Three months ago, Justice Patrick Otieno directed the Kenya Revenue Authority (KRA) not to demand a 12.5% excise duty on bets
• The court's ruling provided momentary respite for SportPesa and Finix punters but set the stage for a looming conflict between the two companies and the taxman
• KRA noted it contested the directive from the Kakamega High Court, and subsequent orders were issued mandating the companies to allocate provisions for the excise tax

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The Kenya Revenue Authority (KRA) has requested the Betting Control and Licensing Board (BCLB) to suspend the trading licenses and paybill numbers of SportPesa and Finix.

This comes amid a tax dispute with the companies.

Why KRA wants SportPesa licence suspended

KRA wrote to BCLB on November 8, several weeks after a directive from the Kakamega High Court instructed the companies not to remit the 12.5% tax on betting stakes.

The court's ruling provided momentary respite for SportPesa and Finix punters but set the stage for a looming conflict between the two companies and the taxman.

“Both taxpayers have not complied with the court order despite our reminders dated September 29, 2023.

KRA noted it contested the directive from the Kakamega High Court, and subsequent orders were issued mandating the companies to allocate provisions for the excise tax for August.

"We hereby request you to kindly but urgently suspend all trading licences and pay bill numbers for SportPesa and Finix until further notice," Weldon Ngeno, the commissioner for domestic taxes, stated, as reported by Business Daily.

Who owns SportPesa?

Kasarani lawmaker Ronald Karauri is the face behind the SportPesa brand.

Karauri left university to pursue his dream of becoming a pilot. During his stint as a captain at Kenya Airways (KQ), he rose to become the chair of the Kenya Airline Pilots Association (KAPA).

He left the airline in 2014 and sold his parcel of land at KSh 25 million to acquire a 6% stake in SportPesa.

The billionaire businessman controls a 54.4% stake in Milestones Ltd, the company behind the betting firm. SportPesa raked in KSh 12.9 billion in profit during its first five years of operation.

When did SportPesa return to the market?

In 2019, SportPesa halted its operations in the country over high taxes charged by the government.

It closed shop after the taxes slapped on the industry, made the business no longer viable.

The company expressed disappointment in the government's decision through parliament to impose a 20% excise tax on all betting stakes.

The betting firm resumed operations in November 2020 after BCLB gave it the green light.