In order to lower their tax burden and avoid paying millions of dollars in corporation taxes, betting companies have been accused of misrepresenting the expenses of sponsorships and community projects. taxes betting companies
According to the Kenya Revenue Authority (KRA), the majority of betting organizations use their corporate social responsibility (CSR) to justify their refusal to pay taxes on monies that they use to support regional soccer teams and other charities.
According to KRA’s chief domestic tax manager, Miriam Sila, the majority of these businesses record losses, hence the government hardly ever collects corporate income taxes.
Ms. Sila mentioned that the Treasury Secretary has been approached by betting companies asking for tax exemptions for their CSR.
And it is not small money. Once you have received the exemption from the Cabinet Secretary, who are you to question?Ms Sila said.
Since then, the court has ruled that the Treasury’s acceptance of the tax breaks without Parliament’s consent is unconstitutional. taxes betting companies
According to KRA, the tax exemptions have been in effect for up to six years and total hundreds of millions of dollars.
This lowers the corporation tax, according to Ms. Sila.
Additionally, the law exempts gaming operators from paying what the taxman claims are excessive amounts of withholding taxes on advertisements.
There is also a tendency to inflate advertising costs.said a KRA official who sought anonymity.
Although it is not mandatory for operators to support local clubs, they are expected to disclose how much money they spend on CSR initiatives.
The chief executive of the Betting Control and Licensing Board (BCLB), Peter Mbugi, ordered all gambling companies to reveal the projects, sums, and recipients of their CSR spending last year.
Mr. Mbugi pointed out that despite the majority of businesses’ claims that their marketing expenditures support CSR initiatives or their commitments to local soccer teams and charitable causes, they rarely really spent the funds. taxes betting companies
The lucrative nature of the industry is highlighted by the recent disclosure that SportPesa made its owners in Kenya a net profit of Sh12.9 billion ($94.6 million) in the first five years of operation.
Kenyan gambling laws do not specify how much money businesses should spend on CSR initiatives Unless they are public lotteries that raise money for social services, welfare, and the alleviation of distress.
Public lotteries may be required by BCLB to spend at least 25% of their gross revenues on the promotion of their lotteries. taxes betting companies