Kenya hikes betting operator SportPesa’s back tax bill to $147m

Kenyan sports betting operator SportPesa’s controversial back-tax bill has grown even larger as the government shows no signs it’s willing to forgive and forget.

Last year, the Kenyan Revenue Authority (KRA) hit SportPesa with a bill for KSH10.3b (US$103m) to cover back taxes the government believes the company owes. The KRA claims the sum represents the 20% tax on gambling winnings that SportPesa was required to withhold from its customers over a two-year period.

This week, the KRA sent SportPesa’s parent company Pevans East Africa Ltd a revised bill for Ksh14.9b ($147.4m), which includes interest on the unpaid taxes as well as Ksh2b in penalties for failure to remit the required sum in a timely manner. The KRA has reportedly given SportPesa 14 days in which to comply or face further financial penalties.

Pevans East Africa claims its hands are tied by last month’s court ruling that refused to lift an order blocking SportPesa and other Kenyan-licensed gambling operators from collecting the withholding tax from their customers. The court is currently mulling a lone SportPesa customer’s challenge of the withholding tax, and SportPesa has said this challenge prevented the company from collecting tax from all its customers.