Betting firms SportPesa and Betin on Thursday registered a major win after a Tax Appeals Tribunal ruled in their favour in the case of a gambler's stake's percentage tax to be withheld.
The Kenya Revenue Authority (KRA) has now been blocked from charging a 20 per cent withholding tax.
In its sitting in Nairobi, Busines Daily reports that the Tribunal ruled that the 20 per cent tax should only be charged on the positive differences that arise from the stake and payout.
KRA has been demanding millions from the betting firms before the ruling was made.
The Tribunal has also shielded betting firms from any form of prosecution or aggression in regard to the 20 per cent withholding tax.
On September 27, SportPesa announced that is was no longer going to operate in the country after the government announced a crackdown on tax evasion.
KRA has insisted that the deduction was to be made on the amount regardless of the outcome of a bet.
“The definition removed the provision for deduction of amounts staked. This amendment was effective 1st July 2018,” KRA said in documents filed in Parliament, as quoted by Business Daily Africa.
The ruling comes a week after SportPesa replaced termination letters with redundancy after the workers were recalled
The firm has since been out of operations after years of success. It now remains unclear whether the company will reopen its doors with the latest court ruling.