The Kenyan Revenue Authority (KRA) and the Attorney General are in a legal battle against a local lawyer over the right to deduct a 12.5 percent excise duty on wagers.
On August 21, a legal petition was filed in the western Kenyan town of Kakamega by lawyer Edward Okwama against operators Milestone Gaming and Standard Global East African, as well as the KRA and the Kenyan Attorney General.
The legal petition sought to declare the gambling excise duty on players' wagers as “unconstitutional”.
The petition was filed as a certificate of urgency, meaning that Okwama wanted to get a legal order stopping the operators and revenue authority from imposing the tax on players while the legal dispute was ongoing.
Okwama argues there should be an income or winnings excise duty instead of the current excise duty on all wagers, whether they win or lose, which he argues goes against the country's taxation principles.
“The multiplicity of taxes levied on sports fans, players, and enthusiasts in the gaming industry is in contravention of the international general principle of neutrality, efficiency, certainty, simplicity, effectiveness, fairness, and non-double taxation in a tax regime,” Okwama said.
The judge overseeing the petition ruled: “Pending the hearing and determination of the application” a “temporary conservatory order restraining first and second respondents (Milestone and Standard Global) from deducting 12.5 percent excise duty from the petitioner and other players” should be implemented.
The KRA was served this order on August 23, 2023, filing its own application in response on August 25, “seeking to set aside the ex-parte temporary conservatory orders”, it told Vixio GamblingCompliance.
The KRA’s application was scheduled for hearing earlier this month on September 5. However, the court ruled that there was another party who wished to join the proceedings and it would be unfair to lock them out, according to the KRA.
The applications are now scheduled for hearing on September 21.
“The order only affects Milestone Gaming Limited and Standard Global East Africa Limited,” according to the KRA.