In a statement, the taxman also advised affected teams on how to resolve claims lodged against them for back taxes, penalties and interest.
Kenyan Premier League (KPL) champions, Gor Mahia, announced Thursday they were broke after losing sponsorship and being slapped with a Sh118m tax lien by KRA with chairman Ambrose Rachier alleging the taxman’s move was a witch hunt against K’Ogalo.
“A number of football clubs were found not to be filing returns or paying relevant taxes e.g. PAYE for their employees and players as well as withholding taxes from those engaged on contract for example coaches.
“It is important to note that Sporting Clubs are required by law to withhold and remit payroll taxes (Pay As You Earn) as well as withholding taxes where they apply as part of Statutory deductions under Sections 37(1) and 35 (1) of the Income Tax Act Cap 470,” KRA said in a statement signed by acting Deputy Commissioner, Marketing and Communications, Ezekiel Maru.
“Under the Income Tax Act, Sporting Clubs are not exempted from making returns and such returns must be accompanied by audited accounts.
“In the absence of a return the Commissioner is empowered by law to carry out an assessment of and to estimate taxes due and any interests that may have accrued thereof,” Maru explained.
“KRA is committed to enhancing voluntary compliance through informed awareness. In this regard, the Authority has put in place elaborate educational programmes targeting existing and potential taxpayers.
“Clubs who may need guidance/assistance on how to comply should contact their relevant tax stations or contact Samuel Aboge on email: Samuel.Aboge@kra.go.ke or Telephone 2813130,” the statement added.
While launching mobile pay bill number 350100 to raise funds from their fans on the Safaricom platform, Rachier claimed KRA were strangling the revenue streams of the local giants by targeting their income sources that were boosted by the KPL television rights deal with SuperSport and until March, Brookside Dairies sponsorship.
“KRA’s effort is to make sure we don’t receive money and we won’t be surprised if somebody comes at the gate to grab our entry collection because there is that deliberate effort to make sure we don’t obtain money and I’m wondering why Gor since no other club has been approached,” he claimed, ignoring archrivals AFC Leopards and Western Stima also came under the taxman’s crosshairs.