SportPesa's Reaction After Court Ruling That Suspended Betting Tax
SportPesa has since been instructed to refrain from deducting the excise tax from the wagers of betting enthusiasts during the course of the ongoing case.
Marvin Chege 
In a game-changing turn of events, Kenya's betting industry is undergoing a transformation following a recent court ruling.
The High Court, under the guidance of Justice Patrick Otieno, delivered a verdict that sent ripples across the spectrum, impacting ardent bettors and major industry stakeholders alike.
The crux of the matter lies in the long-standing 12.5 per cent excise duty imposed on bets. Justice Otieno's ruling cast doubt on the legitimacy of this tax, ushering in a significant departure from the status quo.
Immediate Compliance: SportPesa's Swift Action
SportPesa swiftly responded to the court's judgment. Justice Otieno directed that the excise tax not be collected until the application filed by a dedicated betting enthusiast, Mr Edward Okwama, undergoes a hearing and is resolved.
Outside the Milimani Law Courts. /FILE
SportPesa has since been instructed to refrain from deducting the excise tax from the wagers of betting enthusiasts during the course of the ongoing case.
This directive, commonly referred to as a "temporary conservatory order," represents a pivotal aspect of Justice Otieno's verdict. Recent withdrawals made by one punter indeed indicate that these withdrawals were exempt from the excise duty.
Okwama's Stance: Challenging Inequitable Taxation
Okwama's legal battle is grounded in his firm conviction that the current tax law is inherently unfair. It imposes a uniform levy on bets, irrespective of whether the bettor emerges victorious or faces defeat.
He contended that this approach lacks alignment with fundamental taxation principles, asserting that excise duty should only apply when there are earnings or winnings.
"The inherent issue with this provision is that it subjects the applicant and fellow sports betting enthusiasts and participants to a 12.5 per cent excise duty every time they place a bet or engage, irrespective of the outcome," Okwama vehemently argued.
Furthermore, Okwama highlighted what he perceives as a double standard. He questioned why the government mandates excise duty on bets when a similar principle is not enforced in other domains.
He posited that this resulted in a scenario where bettors are effectively subject to double taxation, as they are also burdened with a 20 per cent withholding tax on their winnings.
Justice Otieno additionally mandated Okwama to serve the betting companies, the Kenya Revenue Authority (KRA), and the Attorney General within a 14-day window.
The case is slated for mention on Thursday, September 21, with the potential to overhaul the betting landscape in Kenya looming large.
The court's decision, coupled with SportPesa's proactive measures, has set the stage for a profound metamorphosis in the betting sector.
The outcome of this legal battle promises to have sweeping ramifications, not only on the taxation of bets but also on the broader dynamics of sports betting within Kenya.
