The Tax Appeals Tribunal has ordered Betway  Kenya to pay taxes amounting to Sh158 million to the Kenya Revenue Authority (KRA).
The  Tribunal ruled in favour of  KRA  in a  case in which the international betting firm, M/S BlueJay Limited, trading as Betway Kenya objected to payment of various tax obligations amounting to Ksh158 million.
Betway Kenya wanted to stop KRA from demanding additional withholding tax on winnings derived from bets placed by punters and Pay As You Earn (PAYE) on the earnings of one of its employees Mr. John Felix Kittony, who the company alleged to have retained as an independent consultant.
The Tribunal ordered the company to pay all the taxes it had agreed to pay in regard to withholding tax on professional fees.
The taxes amounted to  Ksh9.95 million,  capital costs relating to research and processing costs of  Ksh16.5 million.
The taxes also included outstanding withholding tax based on gross winnings of Ksh131.7 million, inclusive of penalty and interest at the time of assessment.
The Tribunal held that the company had computed outstanding withholding tax on winnings on net winnings contrary to Section 34 of the Finance Act, 2016 that was applicable for the duration under review.
On Withholding Tax on professional fees, it observed that from 1st March 2016 to 12th  October 2016 a period of seven months, John Felix Kittony was an independent contractor but became an employee immediately he was appointed director and the company was liable to withhold and remit PAYE from that time.
This comes as a blow for Betway Kenya which resumed operations just last year following clearance by KRA and subsequent issuance of an operating license by the Betting Control and Licensing Board (BCLB).
At the time, Betway stated that going forward it would comply with the required regulations after temporarily being put out of business following a crackdown on betting firms.
“To uphold full compliance with taxation laws, Betway will be deducting 20 per cent withholding tax from winnings in accordance with the law,” the company said in a statement.
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