The government through the National Treasury and taxman, the Kenya Revenue Authority (KRA) have tightened the noose against sports and betting firms requiring them to be paying taxes daily by 1am.
These are among the far-reaching changes that the president William Ruto’s led administration is pushing to raise funds to finance government operations and development projects.
This will also see the taxman plug into the betting firms’ platforms to allow real-time computation of taxes, as the government moves to tame rogue entities in the sector.
KRA has completed a pilot that saw it interlink its tax system with the betting sector to track the 15 percent tax on betting, gaming and lottery as well as the 20 per cent withholding tax on winnings collected from punters every day.
The integration of the systems was one of the reforms under the revenue administration, said Treasury Principal Secretary Chris Kiptoo.
Speaking on the first day of a public hearing on the Financial Year 2023/24 budget, National Treasury Principal Secretary Chris Kiptoo said that KRA had made these improvements on tax administration for optimal collection.
Kiptoo said the government expects to collect Sh15 billion from betting this year equivalent to Sh500 million from betting companies each day during the first day of a public hearing on the Financial Year 2023/24.
“The KRA has linked its systems with those of around seven sports gaming firms, in what is aimed at sealing the loopholes of tax leakages that were exacerbated by the 30-day time lag… KRA has made these improvements on tax administration for optimal collection,” claimed Kiptoo.
Kiptoo stated that taxation on winning bets drops by Sh1.4 billion insisting that the improvements include “implementation of a new Web-based improved VAT System; integration of KRA system with the Betting Sector and mapping of rental properties.”
He noted that KRA had completed a trial integration of the systems as one of the improvements under the revenue administration in order to track the 15 per cent tax on betting, gaming, and lotteries as well as the 20 per cent withholding tax on gains collected from gamblers every day.
The government is aiming to take a larger share of the billions gained from the gambling frenzy, thus this is a part of the taxman’s new digital strategy to enhance tax compliance.
This comes at the same time as the tax authority is transitioning traders to a new computerized register that records and transmits to the taxman all transactions, notably invoices, in real time as part of the most recent scheme to catch cheats.
All tax heads are typically paid after 30 days, according to accusations that betting operators have been sending in the money they have been collecting from customers by 1am, when many Kenyans quit betting.
KRA is under pressure from the new administration of President William Ruto to improve its collections in the current and following fiscal calendars. This is a difficult task because of a weak economic climate that has seen investors alarmed by a possible global recession.
National Treasury Principal Secretary Chris Kiptoo during an earlier press briefing.