The Kenya Revenue Authority is pursuing the Chief Executive Officer and founder of an online betting firm SportyBet Ltd Mr. Sudep Dalamal Ramnani over a multi-shillings tax evasion incident after it was discovered that the company had under-declared taxes between the years 2018–2022.
KRA is now demanding that SportyBet Ltd should clear the Ksh. 5,022,774,709 in tax no later than September 11, 2023. SportyBet Ltd operates in Kenya and many African countries. The founder, Mr Ramnani is a wealthy Indian businessman whose net worth was estimated at $16 million as of 2020.
The Kenya Revenue Authority filed a suit against SportyBet on June 13, 2023, seeking orders for the preservation of funds held in various banks by SportyBet Ltd of up to Ksh. 5,022,774,709. Milimani Commercial Court (Tax Division) in a ruling against SportyBet Ltd dated August 18, 2023, by Judge A. Mabeya, was found to have breached Section 43 of the Tax Procedure Act.
According to an affidavit sworn by Rhoda Onyango of KRA, the authority carried out an audit on Sportybet Ltd and issued an estimated assessment of Ksh. 5,022,774,709. The court noted that Sportybet Ltd. had no known assets in Kenya save for the amounts held in those bank accounts sought to be sequestered. If the orders sought were not granted, there was a risk of the respondent frustrating the collection of the revenue.
However, SportyBet, in a quick rejoinder through a replying affidavit sworn by Clyde Atsango Musotso on July 28, 2023, and August 8, 2023, denied that there had been any assessment of tax at all. Sportybet also denied that it was a foreign entity and that it had operated in Kenya for eight years.
In another affidavit by Joseph Miano dated August 4, 2023, KRA maintained that the tax audit for the years 2018–2021 of the respondent had led to the issuance of the preliminary findings on July 3, 2023, for Ksh. 5,022,774,709.
Further, KRA believed that the issuance of a preservation order was out of caution as SportyBet’s Ltd. director is a foreigner who could transfer the available funds out of jurisdiction. SportyBet claimed that it had been paying taxes and had valid compliance certificates over the years, including one for 2023. The judge noted that SportyBet Ltd. is likely to frustrate the recovery of the tax. The contention by KRA is that SportyBet Ltd. is foreign-owned and that its only director is a foreigner, and he may transfer the funds in the respective accounts beyond the jurisdiction of this Court.
The ruling reads in part “In this regard, the Court is satisfied that in the circumstances of this case, the applicant has succeeded to demonstrate the likelihood of the respondent frustrating the collection of taxes”.