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22bet kenya taxation

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22bet kenya taxation

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The tax laws (amendment) act, 2020

We provide in the ensuing pages our analysis of the enacted changes which take effect from 25 april 2020, other than the changes to the taxation of fuel which the government has deferred to 15 may 2020.

Tax alert: government interventions to cushion kenyans against COVID-19

On 25 march 2020, the president of the republic of kenya outlined the tax interventions the government intends to make to cushion the country against the economic effects of the COVID-19

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BEPS update: key issues for financial services

Economic cooperation and development (OECD) has been pursuing measures to address the perceived use of mismatch and arbitrage opportunities between national tax systems designed to transfer profits to low(er) tax jurisdictions.

Accounting for capital gains tax in kenya

A вђ˜capital gainвђ™ can be ordinarily defined as the difference between the purchase price and the selling price of certain assets.

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Kpmgвђ™s webcast knowledge base features various tax webcasts

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Different types of taxes in kenya

Tax is a financial charge imposed by the national or county governments on individuals or business to fund many public expenditures. The body charged with collecting, assessing, and accounting taxes in kenya on behalf of the state is the kenya revenue authority (KRA). The taxpayer incurs two types of charges (direct and indirect taxes). Indirect taxes in kenya you pay when you buy goods and services and include V.A.T, excise duty, and custom taxes. On the other hand, direct taxes are the percentages you remit directly to the government as income tax.

Types of taxes

Income tax

The direct tax department of the kenya revenue authority deals with income tax. KRA divides income tax into four categories

Pay as you earn (PAYE)

PAYE is the amount collected from people with gainful employment in kenya. Your employer deducts a particular percentage of your salary and remits to KRA each end month/ payday. Below are some of the rates applicable per salary scale.

• Kshs. 11,180 and below (10%)


• Kshs. 11,181 to kshs 21,714 (15%)


• Kshs 21715 to kshs 32,248 (20%)


• Kshs 32,249 to 42,781 (25%)


• Kshs. 42,782 and above (30%)

PAYE applies to bonuses, directors’ fees, commissions, weekly wages, and monthly and annual salaries. Every employee is eligible for a tax credit often referred to as a personal relief. Also, KRA offers insurance and mortgage relief for qualified individuals. After every year (before 30th june), you should file your returns with KRA.

Corporation tax

Companies operating in kenya pay a charge on all their incomes to the KRA. Resident companies’ tax rate is 30% while the non-resident corporations part with 37.5% on all taxable profits.

Withholding tax

Withholding tax is chargeable on

• Interests


• Dividends


• Pensions/ retirement annuity


• Appearance or performance fees


• Royalties


• Commissions


• Management/ professional fees (plus consultancy, contractual and agency fees)


• Rent received by non-resident

The rates of the withholding tax vary and depend on the status of the recipient.

• Dividend income (10%)


• Quality divided (5%)


• Royalties (5%)


• Consultancy/agency fees (5%)


• Contractual fees (3%)


• Interest from bearer instruments (25%)


• Interest from government bearer bonds (15%)


• Qualifying interest from housing bonds (10%)


• Qualifying interest from bearer instruments (20%)


• Insurance brokers’ commissions (5%)


• Insurance agents commissions (10%)

Tax rates for non-resident

• Rent premium for immovable property (30%)


• Rent premium for movable property (15%)


• Royalties (20%)


• Management and professional fees (20%)


• Dividend income (15%)


• Pension/retirement annuity (5%)


• Appearance or performance fees (20%)


• Supporting/arranging an appearance (20%)


• Management or professional fees (12.5%)


• Interest on bearer instruments (20%)

Advance tax

Advance tax caters to the public service vehicles and matatu. The owners pay the tax in advance before they can register their commercial vehicles (PSV). Current rates are

For vans/ tracks/ lorries/ pickups kshs. 1500 or kshs 2400 per ton of load capacity per annum

Station wagon/ saloons/ minibusses/ coaches pay kshs 60 per passenger capacity each month or kshs. 720 per passenger per annum

Residential rental income tax

Residential rental income tax is one of the property taxes in kenya that falls under the income tax. The finance act of 2015 defines the residential rental income tax as the amount payable from accrued incomes from the residential property within kenya and is not above kshs 10 million per income year. The rate charged is 10% of the total monthly gross rent. The tax payment is due every month before or on 20th.

Value added tax (VAT)

According to the value added tax act of kenya, VAT is a consumption charge levied on local sales as well as importation of taxable goods and services. The consumer of the taxable commodity or service pays the VAT. The tax rate applicable is

• 16 %: for all taxable products and services


• 0% for particular groups of goods and services

The period for filing VAT returns (VAT agents) is one month and should be on or before 20th each month.

Custom duty

Customs duty is the export and import taxes in kenya for goods. KRA uses a harmonized system to quantify the tax rate. As such, the rates differ for goods exported and imported within the east african community where a common external tariff applies. Customs stations are at the entry points in the country including airports, ports, and borders. When you import goods into the country, you will pay an import declaration fee of 2.25% of the cost, insurance, and freight. Afterwards, the customs department will advise you on duty payable. The goods imported are subject to a standard VAT rate as well as excise duty. On average, customs duty can be 25% though it may be as low as 0% or even as high as 100%.

Excise tax

The indirect charge administered on the sale of certain goods such as cigarettes or beer is the excise tax. Products and services charged are

• Excisable goods produced by licensed manufacturers in kenya


• Excisable services by authorized service providers in kenya


• Excisable goods brought into the country (imports)

Each of the 47 county governments administers taxes. Some of the county taxes in kenya include

Property tax

The county governments levy a tax on land or land improvements (buildings). The tax rate depends on the location of the property and its value. An approximate figure would be 1% of the property value. The land tax also depends on the current market value of the land. Out of all the counties, nairobi has the highest land rate at 8%.

Entertainment tax

An act of parliament can allow the imposition of tax on any matter that relates to entertainment. The fee could be for hosting an event in a theater or studio or charged on concert tickets.

By now you are probably wondering how to pay taxes in kenya. For you to pay any of the income taxes, you will need to have a PIN from KRA. You also have to register with itax at www.Kra.Go.Ke/portal to submit annual returns. Ensure you have all the required documents you before you start filing returns. The customs and excise duty are paid directly at the customs offices. For county taxes in kenya, each of the 47 counties has designated areas to pay taxes. You can either go to the county offices or deposit directly to the county government accounts.

Uses of taxes in kenya

Revenue generation

By taxing citizens, the government can generate money that can be spent to improve the lives of the citizens or to cater for any other government expenditure. Some areas where the government uses taxes include provision of social welfare, and infrastructure development.

A fraction of the revenues generated goes to financing the debts accrued by the government.

Redistribution of income

Kenya has a progressive tax structure whereas income increases one pays a high percentage of taxes. Since high-income earners pay slightly more than the low earners, taxation enables the redistribution of incomes in the economy.

Controlling externalities

An externality refers to a byproduct or consequence of activity (commercial or industrial) felt by a third party like pollution. In a bid to discourage negative externalities such as noise pollution, governments can impose a tax.

Repricing

Taxation can help reprices goods and services deemed to be incorrectly priced such as alcohol, and tobacco

Representation

The people choose the government to represent them to ensure responsible management of their taxes.

History of taxes in kenya

The history of taxes in kenya dates back to the pre-colonial period when people paid tithes to trade in different territories of a tribe. At the time, the portuguese and arabs were the primary traders. The taxation system then mimicked the islamic law as well as the trade rules. The locals had to pay sadaqa, jizya, and zakat which are part of the islamic law. Other than that, traders paid customs levy, harbor fees and capitation tax (tax per individual). Goods such as cloves, beads, and ivory brought from sultanate were eligible for customs duty. The taxpayers fell into two categories (tax base). Muslim followers paid voluntary taxes or amounts they were willing to give.

When the british took over the east african protectorate (kenya included), they inherited some of the taxation systems of the arabs and portuguese and introduced new rates. The capitation tax remained but controlled by british as it was while portuguese and arabs shared customs revenues. Some of the new taxes introduced by the british were

• Hut and poll tax: A fee payable by all locals per hut through labor, money, and grain or stock.


• Land tax


• Graduated personal tax


• Income tax

By the time kenya gained its freedom, the taxes had included trade, income, and excise duty. During the ten years of independence, the government concentrated on its taxation policy. By 1973, the kenyan government introduced a sales tax. But as the economy faced challenges related to the oil crisis there was a need for fiscal reforms. In the same year, the state launched a 20% withholding tax on nonresident and 10% rate on goods that were duty-free. After the collapse of EAC in 1977, the kenyan government raised the sales tax to 15%, excise duty to 59% from 50% and decreased income tax by 7% to 29%.

By 2000, the government intended to collect taxes equivalent to 24% of the GDP. So they focused more on the consumption aspect (sales tax). As a result, a progressive income tax became functional with the low-income earners paying 10% while the high-income earners paid 65%. The income tax for local companies went up to 45% while that for foreign companies rose to 52%.

Since then, the parliament has amended some of the taxes as well as the rates. VAT replaced the sales tax while income tax, excise duty, and customs rates changed.

22bet kenya

Even as other companies exited the kenyan market after the government increased regulations on gambling and taxation, 22bet kenya remains put. It has grown to become one of the most sought after sports betting platform in the country. This has seen it rank among the best and continue to rise daily with thousands of active members.

This company has been able to get a huge portion of the betting market due to its welcoming site and good features. Its popularity is not only in kenya but in other african countries. The sports betting market has blown up in africa and many international companies like this one are setting up their operations.

African has experienced immense growth in information technology with more people having access to the internet. There is also an increase in the number of smart devices like smartphones and tablets that mean more punters can take part in online gambling from the comfort of their homes or even when on the move.

22bet was established in 2007 and has grown immensely to become one of the best betting platforms in the world. They are fully licensed in europe and kenya under the betting control and licensing board. This has enabled many punters to trust them and feel safe as they place their bets and use a fair platform.

Their website is very simple and easy to use making it ideal for sports betting even for punters who are new to gambling or have a new account on this platform. You can easily navigate from one section to the other without needing any assistance. Football dominates this sports betting platform as it’s the main sport that most kenyans enjoy.

Soccer/football bets are placed regularly by members as there are over 1000 events to choose from daily. Football plays a major role in the country with many avid fans for both the local and international leagues. This is why the majority of the bets placed are for this particular sport.

You need to create a new account if you want to place your bets through this site. If you have an existing one, log in and make your selections. You need to have funds in your account before you’re able to place any bets. Deposits are accepted through mpesa which is a very popular mobile money payment system in the country. The official paybill for this company is 895599 and there is a limit to how much you can deposit. Mpesa can only hold up to kshs. 140000 in your mobile wallet.

There is an app that you can download on your smart devices be it the tablet or smartphone. Apps are easy to use and give you access to your account from any place at any time. You get to log into your existing account and keep an eye on your placed bets.

22bet app

This is an international bookmaker that has managed to rank among the top in the country because of all the features that it provides its punters. Additional features like the mobile app make the betting experience they have even more memorable. There are many companies following suit and have apps that users can easily download. This app provided by this site is easy to use as all you need is a smart device to access it.

You can register a new account on it or log in to an existing one easily. Through the app, you make your selections and place bets from home or on the move at any time. Having an app for this platform on your mobile device means you don’t have to remain stuck in front of a computer for the better part of your day awaiting the results of placed bets. You’re free to keep on with your tasks as you monitor them on the devices.

The one reason sports betting has become so popular is the availability of many sports to watch and bet on. These sports are provided in their sportsbook that has newer and more traditional ones to choose from. You get to take part in rugby, football, gaelic sports, esports, basketball, poker, air race, squash, horse racing, greyhound racing, cycling, skiing, lottery, olympiad, motorsports, trotting, ice hockey, UFC, hurling, special bets, tennis, alpine skiing, table tennis, snooker, volleyball, water polo, muay thai, swimming, handball, floorball, weather, darts, bandy, badminton, cricket, biathlon, aussie rules, TV games, chess, etc.

The app is fully functional and has all the information as the main website that you need to have a good time while gambling online. The app gives you easy access to your account where you can deposit funds and start taking part in the different features apart from sports betting. The interface used is the very user-friendly meaning you won’t get easily bored for you remain active throughout.

Follow the link on the main site to easily download the app as most betting ones are not found on the play store. All you need to do is save the .Apk file on your mobile device and allow it to access apps from unknown sources.

22bet ios app

This app is only accessible by users with iphones and ipads.

• Start a new browsing page to get access to the 22bet site on your phone or tablet. This makes it easier to download it there. Its 22bet.Co.Ke


• Follow this by scanning the QR code for faster download.


• If you opt to download it manually, simply click on the link and follow it.


• This will prompt a file to be downloaded onto your device.


• Click on it and choose ‘install’


• Head to your device settings then select ‘general’ followed by ‘device management.’ once there choose ‘enterprise apps’ then ‘NITEKS, 000’. Click on ‘trust’ and you are now ready to use the app.

22bet android app

Android devices can download this version of the app on their smart devices from the main site on the link provided. This means you have to get access to the website on your smartphone or tablet and allow them to receive apps from unknown sources.

• Get a new browsing site going and load the website for this company 22bet.Co.Ke


• Click on ‘download android app’ to start the process


• This will lead to the download of a .Apk file onto your device


• When the download is complete, click on the file


• Ensure you have allowed your device to access new apps on your settings. This is from unknown sources mainly which are rejected by most devices


• After successfully installing the app you can start using it to access your betting account.

Signing up: fast & easy

You only need to spare a few minutes of your time to get an account up and running followed by depositing funds into it. Just make sure you are of the legal gambling age of 18 and above before you get started.

• Launch a new browsing page and input the main website 22bet.Co.Ke


• Once the homepage loads, click on ‘registration’ located at the top right corner of it.


• Fill in your mobile phone number and click on ‘send SMS’. This prompts a confirmation code to be sent to your phone.


• Fill in the code on the provided space on the form


• Select the currency you prefer to transact in


• Fill in a unique password and confirm it for accuracy.


• If you want you can read the terms and conditions for this betting site by clicking on ‘terms and conditions’. There is also the company’s privacy policy that you can familiarize yourself with.


• Click on ‘register’ to access your new account and proceed to fund it.

Deposit methods: mpesa on board!

You can use mpesa as your main deposit method as it’s the easiest and most available in kenya. Only after you have funded your account can you start placing bets in hopes of turning a profit on the staked amount. Use the right paybill number to ensure you deposit funds to the correct platform.

• Launch the mpesa menu on your phone.


• Click on lipa na mpesa


• Select paybill


• Fill in the 22bet paybill number 895599


• Fill in the account name 22bet


• Fill in the amount you wish to deposit into your betting account


• Fill in your PIN and click on send


• You’ll receive an SMS confirming the transaction and the amount will soon after reflect in your betting account.

Being an international platform with a presence in many other countries has seen 22bet have many other payment options to fund your betting account. These methods include MTS, skrill, megafon, mastercard, siru mobile, visa, euroset, yandex money, amigo, B-pay, telepay, skrill 1-tap, neteller, epay, QIWI, perfect money, quickteller, paydunya, direct bank transfer, cashmaal, sticpay, runpay, fastpay, etc.

The good thing about most of these options provided by this platform is that you don’t have to pay additional service fees to use them. They, however, have different time lengths that you have to wait for the money to reflect in your account after you complete the transaction. There are limits as to how much you can deposit. All the methods have the least and the most that you can transact.

Withdrawal methods

You can opt to use mpesa to withdraw your winnings from your account. This is by far the easiest method but there are other options provided as well. You can use pay4fun, skrill, true money, visa, sticpay, mastercard, fastpay, perfect money, paydunya, bpay, cashmaal, muchbetter, world of planes, world of tanks, and others.

Offline betting

This is one of the most enjoyed platforms for it gives a chance to bettors without internet access to bet using SMS. All you need is a phone with a functioning line to get started. You have to SMS the word ‘join’ to register a new account to 29252 for starters. The company will reply to your request by sending you a new username and password on your phone.

For an added precaution, ensure that you change the password after you’ve received your details to safeguard your account better. The way to reset it is by sending ‘RESET’ to the same number 29252. You’ll receive your new password immediately after.

The information on all the games you can bet on that are yet to start is sent to your phone upon request. Simply send a message to the bookmaker asking for the upcoming matches by SMS ‘NEXT GAME’. Send the message to 29252 and the reply will have the numbers of the different games and their teams. This also has the odds for these games. Make your selection and reply with this information.

In case you’re stuck or need any help, you can send a message to the company. SMS ‘BETHELP’ to the number 29252 and they’ll be in touch.

To get the results of your placed bets, you have to subscribe to the site by sending the SMS ‘SUBSCRIBE’ to the same number. To cease the subscription means you have to SMS ‘UNSUBSCRIBE’.

Live betting

Enjoy other features like live betting on this platform to make sports betting even more interesting for you. Live betting means you can place bets even after the match has started or chosen from the list of the upcoming ones. You have to adhere to the in-play terms and conditions of this platform.

All the games are listed for you to choose from as the site is well-designed for easy navigation. You have the option of live streaming the games you’ve bet on by using the multi-live streaming option provided to you. Simply click on the game and pin it on your screen to watch it in real-time.

When it comes to this feature, not all the sports in the sportsbook are available for live betting and streaming. You can only enjoy boat racing, football, greyhound racing, tennis, lotteries, ice hockey, muay thai, basketball, bandy, esports, bowls, table tennis, cricket, volleyball, badminton, snooker, horse racing, etc.

Conclusion

This is one of the top-ranking sports betting platforms in the country and has managed to garner a large following of active punters. They place thousands of bets weekly with a majority of them being on football. There are features you can enjoy like live betting and live streaming. Download the app on your android or ios device and get started in online betting while on the move.

How is betting taxed in kenya?

How betting taxes affect bettors

In june, 2018 the government of kenya introduced a 20% withholding tax on all wins from betting. This means that any amount won through betting will attract a 20% deduction that goes to the government. For example if you place a bet with total odds of 9.0 along with a stake of sh.100 you will only receive sh.720 as winnings, and not sh.900 as you would earlier. The betting site withhold sh.180 which will be remitted to the government.

How betting taxes affect bookies

The growth of this lucrative industry estimated at sh200 billion annually has dominated talk on the floor of parliament on numerous occasions. Similarly keeping a hawk’s eye on the billions is the ever watching government through the kenya revenue authority (KRA) aiming to squeeze a shilling of revenue from every inch of the economy.

With the passing of the finance bill 2018, KRA collects 15 per cent betting tax levied on betting firms’ gross gaming revenues. The rate was initially pegged at 35 per cent but was reduced after outcry from stakeholders in the industry.

As with every other commercial large company, a further 30 per cent is levied on profits made by the betting companies otherwise known as corporate tax.

However despite the taxes gotten from the revenues and profits of the betting firms, the government was not satisfied. In a bid to curtail the rise of betting described as a sin industry, the state went after winnings won by punters.

A report by the betting control and licencing board revealed that betting companies paid a drop in the ocean amount of sh4 billion in taxes despite generating sh204 billion in revenue.

There has been a lack of consensus on the interpretation of winnings leading to strained relations between the industry and the taxman

At the core of the issue is the interpretation of betting in kenya. KRA views the practice of placing bets as a form of entertainment as it does not lead to income generation because it is a consumption. Thus it in practice taxes the winning of punters when they wage successful bets.

The 2018 finance bill heralded the withholding tax imposed on all gross winnings payable by all sectors governed by the betting, lotteries and gaming act i.E. Gaming and prize competitions. Thus winning clients will only be liable for 80 per cent of their winnings.

The tax required by the government will be deducted by the betting firm immediately a winning bet is complete.

Betting firms have termed the withholding tax as extortionist since it taxes consumption before the consumption actually happens.

Also hanging over gamblers’ heads like the sword of damocles is the possibility of the introduction of excise duty on betting activities at the rate of 10 per cent of the wager placed. Proposed by then treasury CS henry rotich in the 2019/2020 budget, it could soon be law should parliament accept the new tax proposal aimed at sieving out the sin exercise.

Finally, the gaming bill 2019 passed by parliament earlier this year provides a steep barrier of entry for betting firms in kenya with hefty licencing fees to set up base in the country. New entrants will be required to part with sh100 million to the government for gaming securities to serve as a cushion to gamblers should the companies refuse to pay a windfall arising from many gamblers winning from their wagers.

In addition the bill raised the minimum amount of a bet.

So, let's see, what we have: the KPMG tax practice in east africa continues to provide high-quality, unparalleled and sound professional services in our evolving markets. At 22bet kenya taxation