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Kenya Revenue Authority demands KSh 8.5 b withholding tax arrears from SportPesa, Betin

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– Kenya Revenue Authority declared Safaricom collecting agent for the two betting companies

– Safaricom is expected to immediately remit the said amount to Central Bank of Kenya account

– SportPesa reportedly owes the taxman KSh 3.29 billion whereas Betin owes him KSh 3.29 billion in withholding tax arrears

Kenya Revenue Authority (KRA) has demanded KSh 8.59 billion withholding tax arrears from top betting firms SportPesa and Betin Kenya as the taxman moves to tighten the noose on the necks of tax evaders.

The authority also declared Safaricom as the collecting agent for Pevans East Africa and Gamcode Limited which trade under brand names SportPesa and Betin respectively.

READ ALSO: KRA receives nod to collect over KSh 2.7 billion tax arrears from betting firm Sportpesa

Kenya Revenue Authority demanded KSh 8.5 billion from Sportpesa and Betin this being withholding tax arrears to be paid by Safaricom, the collecting agent for the two betting firms. Photo: KRA.
Source: UGC

READ ALSO: Gavana wa CBK Patrick Njoroge awahamasisha wakaazi wa Kondele hukusu noti za kizazi kipya

The taxman reportedly penned a demand letter to Safaricom in June 2019 asking the telecom giant to immediately remit KSh 8.59 billion withholding tax arrears from SportPesa and Betin being their collecting agent.

“I hereby declare you to be an agent of the above taxpayer (SportPpesa) and require you to pay the sum of KSh 3,296,532,012 being tax due by the said taxpayer,” stated KRA manager for debt enforcement, Asha Salim, as quoted by Business Daily.

READ ALSO: Relief as court suspends Uhuru’s 1.5% housing levy deductions

SportPesa reportedly owes the taxman KSh 3.29 billion whereas Betin Kenya is expected to remit KSh 3.29 billion, money that KRA tasked Safaricom to wire to Central Bank of Kenya (CBK) account.

Safaricom, just like like Airtel, provide the platform where customers of the betting companies can do all their transactions, deposits and withdrawals, via the e-wallet.

READ ALSO: Government to suspend licences of all betting firms in the country from July 1

The latest move by KRA comes barely a month after the taxman was given the green light by court to collect more than KSh 2.7 billion withholding tax arrears from SportPesa.

A ruling made by Milimani Commercial Courts chief magistrate Peter Gesora granted the taxman permission to collect the taxes on winnings, in this case taxes deducted from incomes or payments due to winners in sports betting.

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In the landmark ruling delivered on May 23, 2019, Gesora stated the nature of sports betting was that winnings are unpredictable and a player cannot be certain on the amount they will win.

“That being the situation, it is not sound to argue that certain amount should not be collected by withholding tax agents.

Revenue collection is well regulated by statute, and by the fact that Sportpesa is a tax agent is a clear indicator that all those using its platform are obligated to pay tax on their winnings,” Gesora ruled.

READ ALSO: Kenya Revenue Authority decry missing KSh 2.7 billion revenue from betting wins due to court order

The chief magistrate further noted the KRA commissioner of domestic taxes is mandated to collect taxes from sports betting firms and remit the same to the Sports, Arts and Social Development Fund as stipulated in Section 35 (1) i and 3 (h) of the Income Tax Act.

He was ruling on a 2014 case filed by one Benson Irungu against Sportpesa.

Irungu’s suit was seeking to stop the betting firm from deducting and remitting taxes arising from individual’s winnings in sports betting.

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Source: Tuko News

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KWS reverses park entry fees increase after uproar

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OTIATO GUGUYU

By OTIATO GUGUYU
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The Kenya Wildlife Service (KWS) Tuesday withdrew a notice increasing park fees by up to 300 percent for Kenyans across the country from July following public uproar.

KWS said in a statement that the higher fees had been suspended. Tourism and Wildlife Cabinet Secretary Najib Balala earlier termed the Business Daily report of the park fees hike misleading.

The March 30 notice announcing the date when the new higher rates would take effect was linked to an October 18 notification from Mr Balala.

The higher fees drew protest from Kenyans on social media who argued that the timing was wrong, citing the effect of coronavirus-related travel restrictions on Kenya’s tourism sector.

“This is to inform the public that KWS in consultation with Ministry of Tourism has suspended the implementation of the new rates until further notice due to the prevailing circumstances occasioned by the coronavirus,” said KWS in a statement.

Kenya has confirmed 172 cases of the coronavirus pandemic that has hit the tourism sector with the borders closed and social distancing rules prompting hotel shutdowns.

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The new rates were to see locals pay Sh1,500 to visit Lake Nakuru and Amboseli national parks during the peak period and Sh800 during the off-peak period, up from the current Sh500. This reflected a 300 percent rise.

The Peak is between July and March and low season between April and June. Entry fees for locals in the Nairobi National Park were to go up to Sh1,500 and Sh800 during peak and off peak seasons respectively, up from Sh300.

Meru Park, Aberdare, Mt Kenya, Tsavo charges were to jump from Sh350 to Sh1,000 during the peak season and Sh400 the rest of the time.

Foreigners were to pay $70 in Nairobi National Park up from $40 in peak season, with off-peak rates remaining unchanged at $40.

At Amboseli and Lake Nakuru peak entry fees for foreigners were to be cut to $70 from the current $80 while off-peak charges were to drop from $60 to $40.

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Carrefour records Sh18.7bn sales in Kenya

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ANNIE NJANJA

By ANNIE NJANJA
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French retail chain Carrefour recorded sales worth Sh18.7 billion from its Kenyan outlets last year, the company has disclosed in its annual financial report.

Majid Al Futtaim, the exclusive holder of Carrefour’s franchise in Kenya, announced the 28 percent jump in sales from Sh14.6 billion recorded in 2018 indicating that its aggressive expansion bid across major towns in Kenya was paying off.

The retailer said since launching in Kenya four years ago, the franchise of the French hypermarket chain had grown faster than expected, attracting a strong clientele base among the country’s expanding middle class.

The retailer announced plans to continue the expansion of its retail and entertainment business across key markets, including in Africa.

“In 2020, Majid Al Futtaim Retail will open its first store in Uzbekistan, with plans for further expansion to new markets in Central Asia and Africa and scale up its e-commerce capacity to meet growing online demand, through innovative fulfilment solutions,” the group said in the report.

The retailer has been expanding its presence in Kenya after taking over spaces previously occupied by struggling supermarket chains, including Nakumatt and Uchumi, as well as opening new outlets to cash in on the underserved market.

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The retailer has seven branches in Kenya with the eighth one set to open on Uhuru Highway near Nyayo roundabout-taking over space previously occupied by the collapsed retailer Nakumatt.

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The branch, which was set to be opened before the end of March, has faced delays due to the current Covid-19 pandemic.

The retailer’s other branches are also strategically located at the Hub in Karen, Village Market, Two Rivers Mall, Thika Road Mall and Sarit Centre in Westlands.

One-time market leader Nakumatt, now under administration, and cash-strapped Uchumi, have shut the majority of their branches.

The gap left by the collapse of the two retailers has created a void in the sector that has local and international chains scrambling to fill.

The spirited entry into Kenya by multinational chain stores like Game and Shoprite is stiffening competition, pitting new players against the local family-owned retailers.

French firm Amethis recently bought a 30 percent stake in Naivas to back the expansion of the retailer.

Majid Al Futtaim made public its Kenya annual sales in a newly-released financial report that also puts its local assets as of December 2018 at Sh7.2 billion, up from Sh4.3 billion in December 2018.

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Our budget too lean to cushion us, says Yatani : The Standard

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Kenya is operating on a shoe-string budget, spending nearly all its income with very little left for a rainy day.
Treasury Cabinet Secretary Ukur Yatani (pictured) told The Standard that Kenya’s economy had little reserves to help it absorb the current shocks, forcing it to trim its budget and redirect resources towards the fight against coronavirus.
This has forced the State to adjust its budget and seek funds from outside as the country grapples with the pandemic.

SEE ALSO: Taxman seeks Sh800 billion in five months

“Kenyan economy is not that big. We do not have enough reserves to cushion ourselves,” said Mr Yatani in an interview.
As a result, the government has been scrapping for cash and resources from everywhere.
Besides seeking outside help from development partners such as the World Bank and International Monetary Fund (IMF), the National Treasury has received about Sh7.4 billion from the Central Bank of Kenya. The funds from CBK had been rendered useless at the end of the exercise to withdraw old Sh1,000 notes.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

The World Bank and IMF will also give Kenya another Sh122 billion, complementing money that will be flowing into the Covid-19 emergency fund. Money saved from pay cuts taken by senior government officials and county chiefs will be channelled to the fund. 
Yesterday, President Uhuru Kenyatta directed the National Treasury to utilise Sh2 billion recovered from corruption proceeds to support the most vulnerable members of the society.

SEE ALSO: Protests as team vets nominee for CDF chief

Emergency kitties
Yatani noted that there are some countries, particularly resource-endowed, which have fat emergency kitties which they draw from in case of any shock.
“So, our economy, we do not have that. It is just been a process, in-out,” he said.
He said this even as it became apparent that the government had only Sh2.8 billion in its accounts by the end of February, which was too little to help it combat the effects of coronavirus.
“When such a situation happens, since we do not have adequate reserves, what do we do? We have to revise our taxes with the view of giving incentives to the industries to stay afloat,” said Yatani.

SEE ALSO: MPs reject nominee for constituency fund seat

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Kenya being a young economy that is still grappling with how to feed its population and trying to grow, the impact of the pandemic, said Yatani, is heavy.
He said the level of anxiety the crisis has created is beyond control, citing the stock exchange which has seen investors lose billions within a short time.  
Fearing that the pandemic might snowball into a full-blown health crisis, President Kenyatta has instituted stringent measures, among them the imposition of a 7pm to 5am curfew. 
Yesterday, President Uhuru Kenyatta announced yet fresh measures barring people from moving into and out of Nairobi Metropolitan Area, Kilifi, Kwale and Mombasa counties.  
Schools, pubs, nightclubs, and other entertainment joints have since been closed. Workers have been forced to work from home, leaving matatus and restaurants without customers.
Around the country, open-air markets, where most poor people buy their food, are increasingly being closed by county governments.
The supply chain has been seriously affected, particularly from China where the country gets 21 per cent of its imports. 
Export of flowers and tea has also been curtailed.
“These are disrupted. And therefore we are staring at very difficult times of possible loss of jobs, loss of income, and loss of livelihoods,” said Yatani.


Are you suspecting that you have coronavirus? Before you rush to the hospital, do this quick easy self-assessment test. #StayHome #WashYourHands HERE.

Treasury Cabinet Secretary Ukur YataniCoronavirusCovid-19

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