Court blocks KRA from taxing gambling winnings

February 18, 2014
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Justice David Majanja issued the temporary order stopping KRA from implementing the new levies which came into effect from January 2014/XINHUA FILE
Justice David Majanja issued the temporary order stopping KRA from implementing the new levies which came into effect from January 2014/XINHUA FILE
NAIROBI, Kenya, Feb 18 – The High Court has stopped the Kenya Revenue Authority (KRA) from imposing new levies on winnings, pending the hearing and determination of a petition filed by casino operators.

Justice David Majanja issued the temporary order stopping KRA from implementing the new levies which came into effect from January 2014.

The 42 casino operators filed a petition in court through Kipkenda and Company Advocates challenging the new law which requires them to deduct 20 percent withholding tax from gamblers on winnings gained, pointing out that it will kill the gaming industry.

“The amendments would drive away gamblers especially foreigners who will choose to take their money elsewhere in neighbouring countries such as Tanzania which do not impose withholding tax on players from winnings gained from betting and gaming,” said lawyer Patrick Wachira.

They contend that the National Assembly did not consult the stakeholders in the gaming industry before passing the law to impose the levy.

“The casino operators were not given audience to air their views before the law was amended as required by the Constitution,” Wachira told the court.

The lawyer added that the levies would affect tourism adversely because tourists who intend to gamble as part of their holiday will shun Kenya as a tourist destination.

The operators are also accusing the National Assembly of failing to consider the recommendations of the Commission on Revenue Allocation on the sharing of revenue between the National and County Governments.

The case is set for hearing on February 27, 2014.

The President assented to the Finance Act 2013 , Act No 30 of 2013 which stated income tax should include winnings from betting and gaming subject to 20 percent withholding tax.

The amendments took effect in January 2014 with the operators required to remit the tax to KRA the subsequent month.

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