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Betting firms in Kenya to remit taxes daily through M-Pesa

Betting companies in Kenya will now be required to calculate their taxes after midnight every day and send them to the government by 7 a.m. the next morning using the KRA’s Mpesa Paybill numbers.

It is estimated that 137 sports betting sites are set to use Safaricom’s mobile payment service M-Pesa to send betting taxes in real time to the Kenya Revenue Authority (KRA) on a daily basis. 

By May 12, 2023 when real-time remittance of the wagering taxes completely takes effect, the betting companies are required to have fully integrated their systems with those of the KRA.

KRA linked a total of 20 new betting firms to the new system thus bringing the total number of integrated bookmakers to 36 after the initial inclusion of 16 betting firms in a pilot that began last October.

Prior to the May 12 go-live date, betting companies are obliged to create an M-Pesa pay tax API and a data transfer service to start the real-time tax remittances.

Following this pronouncement, KRA, betting businesses, and Safaricom are anticipated to sign non-disclosure agreements. Integration testing for the M-Pesa pay service is anticipated to take place between April 25 and May 5.

Safaricom is anticipated to handle the bookmakers’ bulk payments through the recently established Daraja service, a programmable interface that builds a bridge for payment integration to online and mobile applications. 

The KRA claims that the telco’s readiness for integration at the piloting of the new system, which aspires to enable daily tax remittances and real-time data transfer, was a factor in the KRA’s selection of Safaricom’s M-Pesa.

Safaricom was readily available to work with us on the pilot. However, it’s not just Safaricom as this is open to other providers.

KRA acting commissioner general Risper Simiyu stated.

Betting companies must calculate their taxes after midnight every day and send them to the government by 7 a.m. the next morning using the KRA’s pay bill numbers.

The remittances pay excise duty, is assessed at a rate of 7.5 percent of bets placed, and withholding tax on winning bets, is assessed at a rate of 20 percent.

The government’s objective of collecting money at the source is aligned with the system integration between the two organizations.

Read Also: A Bill To Regulate the Kenya Gambling Industry Before Parliament

According to KRA, the relationship will help bookmakers as well as itself from the aspect of increased revenue generation and simpler tax compliance.

From the KRA side we will get visibility and credibility while bookmakers will benefit from increased compliance and reduced costs. From where we sit, we hope we can move with speed so that we are all working from the same book.

added Mrs. Simiyu

On why Safaricom is the one running the show, KRA assistant commissioner-general Risper Simiyu was quick to state that Safaricom was willing to collaborate with KRA on the pilot phase. She however stated that other providers were welcome to join forces with Safaricom in offering the service.

The taxman has already seen an increase in betting tax revenue, with nettings between November 1 and April 16 increasing by 29% to Sh6.6 billion over a prior comparable period.

The systems integration is based on eradicating dishonest industry operators in addition to supporting betting business income.

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Jeremiah Maangi

A trusted igaming leader & author for articles bringing positive change in the African gambling industry. African gambling domains broker. Intelligent knowledge of customer acquisition and retention strategies. Available for new & existing gambling operations consulting and marketing services in Africa. Crypto enthusiast.

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