Kenya Revenue Authority (KRA) wants full implementation of an automatic tax data system by the Betting Control and Licensing Board (BLCB), two years after a similar plan by the sector regulator flopped.

This as KRA eyes to collect Sh24 billion in the current 2022/23 financial year from BLCB having collected Sh15.8 billion so far.

Automation of the BCLB system will allow the board to share vital data with other state agencies to enhance the monitoring of the lucrative betting activities and tax remittances.

KRA currently collects three major tax heads from the betting and gaming sector, comprising Betting Tax returns charged at 15 per cent of gross gaming revenue, Excise Duty of 7.5 per cent, and Withholding Tax (WHT) charged at 20 per cent.

Real time transmission

Out of these three, KRA has automated daily tax remittances and real-time data transmission for WHT and Excise Tax heads, giving it better visibility to enable it seal tax holes in the betting industry.

However, the betting tax returns data, which is often collected and transmitted to KRA by the sector regulator BCLB is still conducted manually on a monthly basis, creating more challenges to the taxman in terms of coordination.

“We are having challenges we are experiencing in the industry. There is a need for BLCB who is the regulator and the monitor of the industry to up their game. It is BLCB who give us data for the betting return so that is still one area where KRA is working on to ensure the betting return is online,” says Ms Miriam Sila, chief manager at KRA’s Domestic Tax Department. She was speaking during yesterday’s media engagement.

The push by the taxman to automate data transmission is among the latest technological moves to upgrade compliance levels in the entire betting sector amid pressures to improve the country’s revenue collection to finance the budget.

The first phase of hooking betting firms on the KRA automated tax system commenced last November by on-boarding 16 major companies to daily remit Excise duty and WHT. The taxman has so far collected over Sh5.8 billion in total from the two tax heads.

In the second phase, which started in January 2023, the sector’s data are being verified, and compliance checks are conducted on the taxpayer side in the event of inconsistencies.

In the current 2022/23 financial year, KRA target from the betting sector is Sh24b billion and has so far nabbed Sh15.8 billion.