Sportpesa Cleared by KRA

Kenya’s most popular betting site Sportpesa has been cleared by the country’s tax authority to regain its operating licence after a two-month hiatus for failing to pay backdated withholding taxes.

In a statement released on Tuesday, the firm said it had received the green light from the Kenya Revenue Authority (KRA) to renew its business licence from the Betting Contol and Licensing Board (BCLB).

The firm said it was optimistic of a return in the near future after engaging with the regulator and the government towards creating better understanding of tax administration in the gaming industry.

The negotiations to return the company to normalcy were shrouded in secrecy as only the top management of Sportpesa and KRA were involved in the closely guarded talks.

It will now have to apply afresh for the business licence from BCLB in order to resume normal operations.

It added that it will comment soon on the expected date of resumption of its operations as it seeks to operate as a law abiding business.

This will come as good news to Sportpesa customers with the resumption of major European football leagues across the world last month as well as the Kenyan Premier League which the company sponsors.

With the lull in betting activities on their favourite gaming site, betting fans had been forced to switch to other sites as the shutdown dragged on for over 60 days eating into the new football seasons.

Engaged in a bitter legal dispute for the last two months, Sportpesa was faulted by the taxman over failure to remit Sh10.3 billion dating back three years ago. The company however defended itself from KRA’s tax claims saying it had been compliant since its inception in 2014.

This entails committing to abide by the 20 percent deduction of gamers’ winnings in tax in the new tax sxhedule.

KRA recently cleared 10 more betting companies to resume operations after negotiations to end their tax disputes as well. These include Betway, Betboss, Palms Bet, MozzartBet, Lucky 2 u, Eastleighbet, Odibets, Easibet and Ken Bookmakers.

Sportpesa was among 27 other betting firms that had their licences revoked by the government in a heavily publicized crackdown of the industry led by Interior CS Fred Matiang’i. As a result, their mobile money paybills and SMS short codes were withdrawn.

They were given 3 month window in which they were to meet stringent conditions set by the state mainly concerning tax compliance and foreign directorship regularization.

Sportpesa sued the government demanding compensation for substantial business lost during the impasse.

Sportpesa CEO Ronald Karauri argued it was illegal to suspend their paybill and SMS shorcodes since they had obtained a court order to continue with business.

As a result, it cancelled all local sponsorship agreements in early August. The firm is the sponsor of Kenya’s top-flight football league dubbed the Sportpesa Premier League to the tune of Sh150 million annually.

In addition it sponsors clubs such as current league champions Gor Mahia and AFC Leopards. It is also the sponsor of female boxing star Fatuma Zarika.

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