[2024] KETAT 837 (KLR)

Zumandu Limited v Commissioner of Lecal Services and Board Cordination (Tax Appeal E394 of 2022) [2024] KETAT 837 (KLR) (Civ) (28 June 2024) (Judgment)

Neutral citation: [2024] KETAT 837 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Civil

Tax Appeal E394 of 2022

RM Mutuma, Chair, EN Njeru, M Makau, B Gitari & AM Diriye, Members

June 28, 2024

Between

Zumandu Limited

Appellant

and

Commissioner of Lecal Services and Board Cordination

Respondent

Judgment

1. The Appellant is a limited liability company duly incorporated under the Companies Act of the laws of Kenya, and its principal business is betting and gaming services trading as Betlion Kenya.

2. The Respondent is the principal officer appointed under the Kenya Revenue Authority Act and mandated with the responsibility of assessing, collecting and accounting for all tax revenue as an agent of the Government of Kenya. The Respondent is also mandated with the responsibility of the administration and enforcement of the statutes set out under the schedule to the said Act.

3. The Appellant offers various products and services including sports betting and casino.

4. The dispute giving rise to this appeal arose out of an audit conducted by the Respondent on the Appellant’s books, records and accounts and upon which after considering the information, explanations and documents provided by the Appellant, the Respondent on 31st March 2023 issued an assessment for withholding tax on winnings and excise duty for the period January 2019 to May 2022 for the sum of Kshs. 9,819,918. 00.

5. The Respondent had applied the tax rate of 20 % as introduced in the Finance Act 2019, and 7. 5 % for betting, gaming, prize competition and lotteries as reintroduced in the Finance Act 2021.

6. The Appellant dissatisfied with the said assessment lodged its Objection on 28th April 2023.

7. On 19th June 2023 the Respondent issued its Objection Decision and confirmed the additional assessments.

8. The Appellant being aggrieved by the Respondent’s Objection Decision lodged its Notice of Appeal on 19th July 2023.

The Appeal 9. The Appellant filed its Memorandum of Appeal filed on 20th July 2023 and set out the following grounds of appeal:i.That the Respondent erred in law and fact in demanding Withholding Tax (including penalties and interest) amounting to Kshs. 4,614,269. 00 out of the total of Kshs. 9,957,916. 00 as a result of a factual and legal error in ascertaining, interpreting, and computing of what constitutes winnings in relation to a book maker’s transaction in relation to the assessment of withholding tax (WHT).ii.That the Respondent erred in law by demanding WHT amounting to Kshs. 4,6144,269. 00 out of the total sum of Kshs. 9,957,916. 00 despite cogent legal explanation and guidance on what constitutes winnings under this tax head by the Honorable Tribunal in TAT No. 304 of 2019, reaffirmed by the High Court in HCOMM ITA/E003/2019. iii.That the Respondent erred in law and fact by imposing a retrospective consideration by demanding WHT on winnings from the Appellant for the period in review based on a calculation that is not supported by the prevailing law and decisions of the Tribunal.iv.That the Respondent erred in law and fact in demanding Excise Duty (including penalties and interest) amounting to Kshs. 5,343,647. 00 out of the total of Kshs. 9,957,916. 00 as a result of a factual and legal error in ascertaining the same noting that the Tax had already been settled by the Appellant and evidence provided for the said settlement.v.That the Respondent erred in fact by utilizing and applying erroneous and arbitrary calculations leading up to the total amount of Kshs. 9,957,916. 00 as indicated in the Objection Decision.vi.That the Respondent erred in fact by providing erroneous calculations leading up to the total assessed amount of Kshs. 9,957,916. 00, which calculations are not only befuddling but arithmetically inaccurate and hence does not satisfy the taxation principles of certainty and simplicity.

The Appellant’s Case 10. The Appellant’s case is set out on its;a.Statement of Facts dated and filed on 2nd August 2023, together with the documents attached thereto; and,b.Written submissions dated 13th February 2023 and filed on 27th February 2023.

11. The Appellant stated that it is in the business of betting and gaming licensed by the Betting Control and Licensing Board. It stated that it provides an online platform to its customers through a website and mobile application, where the customers log in to the system where they can participate in various games as well as place bets on sports-backed games or casino slots. Based on the outcome of the game, the customer may either win or lose on the bet placed.

12. The Appellant also stated that the winnings by the customer are usually deducted from the bet placed as demonstrated here below :i.Customer A loads Kshs. 1,000. 00 onto his online wallet held with the Appellant;ii.Customer A who is a soccer fan, places a bet of Kshs. 1,000. 00 on outcome of a Chelsea ~vs ~ Manchester United game;iii.Customer A wins the bet by correctly predicting the outcome of the soccer game and wins Kshs. 10,000. 00;iv.The Appellant proceeds to reimburse Customer A their bet of Kshs. 1,000. 00 and pay winnings of Kshs. 9,000. 00;v.The Appellant deducts WHT on the winnings of Kshs. 9,000. 00 based on the legal provisions.

I.Withholding Tax 13. The Appellant stated that the definition of “winnings” is provided for under Section 2 of Income Tax Act as follows;“(2)Winnings include winnings of any kind and a reference to the amount or to the payment of winnings shall be construed accordingly.”

14. The Appellant also stated that WHT is provided for under Section 35(3) of the ITA as follows;“(3)Subject to subsection 3(A) , a person shall , upon payment of an amount to a person resident or having a permanent establishment in Kenya in respect of winnings which is chargeable to tax , deduct therefrom at the appropriate resident withholding tax.”

15. The Appellant also stated that the Third Schedule (Heading B, clause 3 (i) and clause 5 (i)) of ITA provides for the rates of WHT at 20 %, which amount is liable to be withheld by the payer (the Appellant) upon payment of the winnings to the customer as per the provisions of the ITA.

16. It was stated by the Appellant that on 25th June 2018, Parliament enacted the Tax Laws (Amendment) Act, 2018, which came into effect on 1st July 2018. This law amended Income Tax Act definition of winnings to be “the positive difference between payouts made and stakes placed in a given month, for each player, payable to punters by bookmaker licensed under the Betting, Lotteries and Gaming Act.”

17. It further stated that on 21st September 2018, parliament enacted the Finance Act, 2018, which expanded the scope of winnings to cover other prizes. Section 2 of the ITA defined winnings as “winnings of any kind and a reference to the amount or the payment of winnings shall be construed accordingly”, which reverted the definition to that in the Betting, Lotteries and Gaming Act.

18. The Appellant contended that these definitions do not explicitly or implicitly imply that winnings under the ITA or BLGA should include the bets or the gross payout, otherwise the legislature would have made it clear in the legislation.

19. The Appellant stated that in the case of TAT 304 of 2019 Pevans East Africa Ltd vs. Commissioner of Domestic Taxes, the Tribunal held that winnings as stipulated in the ITA refer to payouts by the licensee but does not include amounts staked by the punter and agreed withholding tax is only on the winnings. The position was upheld by the High Court in HCC ITA/E003 of 2019 Commissioner of Domestic Taxis vs. Pevans Ltd & 6 others.

20. In the foregoing case, the Appellant relied in the argument that the provision to collect WHT from the Appellant was Section 35 (6) of the ITA which was repealed by the Finance Act, 2016. The Appellant contended that the impact of repealing the section was that, the recourse for the Respondent was to recover the same from the punters. It stated that when the Government realized that there was no legal provision allowing it to collect WHT from agents, it reintroduced the provision through the Finance Act 2019, being an amendment to the Tax Procedures Act, the introduction of the aforesaid provision in the TPA being proof that a similar provision was not in existence.

21. The Appellant contended that the Respondent in its Objection Decision assessed total WHT of Kshs. 3,132,376. 00 for the period 2019 to 2022 as follows ;i.WHT per Betslip Kshs. 80,556,455. 00ii.WHT per Casino Kshs. 8,500,430. 00iii.Total WHT on winnings Kshs. 89,056,885. 00iv.WHT on winnings paid Kshs. 85,924,509. 00Tax due Kshs. 3,132,376. 00However, it stated that the assessment for the period 2019 was not valid, and secondly during the period of the assessment it was in a credit position.The 2019 assessment was broken down as hereunder;i.Wht per Betslip Kshs. 45,837,538. 00ii.Wht per Casino . Niliii.Total WHT on winnings Kshs. 45,837,538. 00iv.Wht on winnings paid Kshs. 43,494,878. 00v.Tax due Kshs 2,342,660. 00

22. The Appellant relied on the High Court decision in the Commissioner of Domestic Taxes vs. Pevans East Africa Ltd & 6 others HC ITA E003 of 2019 in which it was held that there was no operative provision in the tax legislation allowing collection of un-deducted WHT and attendant penalties and interest from withholders. It stated that based on the foregoing, the Respondent cannot proceed to penalize any taxpayer due to an alleged failure to withhold taxes and therefore the entire demand from January 2019 to October 2019 is not valid.

23. The Appellant also stated that in the same period October and November 2019, the Appellant overpaid Wht by Kshs. 1,171,948. 77. 00 and based on the foregoing, the Appellant stated that there was no outstanding tax liability owed to the Respondent by the Appellant for this period.

24. The Appellant also averred that during the period of the assessment, they were in a credit position based on payments made to the Respondent in respect of statutory remittances and taxes.

25. The Appellant annexed its reconciliation for the period 2019 to 2022 to demonstrate the credit position. It stated that based on the annexed reconciliation, it demonstrates as follows:i.In 2019, there was an overpayment of Kshs. 1,171,949. 00. ii.The Appellant made a payment of Kshs. 990,743. 00 which resulted to a credit of Kshs. 823,587. 00. iii.The resultant net position for the period under audit is a credit of Kshs. 1,372,976. 00.

II. Excise Duty 26. The Appellant stated that the Respondent assessed an excise duty of Kshs. 3,767,494. 00 for the period 2019 to 2022, based on: --Stakes per system data 315,108,836- Excise duty 47,734,399- Excise duty rates; 2019 ( 20 %) ;2020 ( 20 %); 2021 (7. 5 %); 2022(7. 5%)-Excise duty paid 43,966,905. Tax Due 3,767,494. (the detailed calculations and reconciliation broken down in respective years is attached to the Appellant’s schedules)

27. The Appellant averred that based on the foregoing calculations and reconciliations;a.The Appellant was assessed and paid all its outstanding taxes;It stated that for the period July 2019 to December 2020, the Respondent audited and assessed the Appellant resulting to generation of Pay in Slips, and confirmation of payment for Kshs. 1,017,283. 00. And for the period December 2019 to June 2021, the Respondent assessed the Appellant again resulting to the generation of Pay in Slips and confirmation of payment for Kshs. 608,535. 00. The Appellant averred that there is no outstanding excise duty liability for the period in question July 2019 to June 2021. b.The Appellant used the tax workings based on the audited financial statements. The Appellant averred that the numbers used by the Respondent in the tax workings were numbers picked by the Respondent during the systems audit, and were based on draft figures.

28. The Appellant stated that Section 709 of the Companies Act provides;“The directors of a Company shall ensure that the company’s annual financial statements for a financial year are audited in accordance with this part”

29. The Appellant stated that in accordance with the foregoing provision, it proceeded to have its financial statements audited according to internationally accepted accounting standards. Thereafter, the Appellant used these numbers to calculate its excise duty liability and remitted the same to the Respondent.

30. In its submissions, the Appellant reiterated the provisions of Section 2 and 35(3) of ITA Respectively defining winnings and providing for withholding tax on winnings.

31. The Appellant also submitted that The Third Schedule (Heading B, Clause 3/9i) and clause 5 (i) of the ITA provided for the rates of withholding tax on winnings at 20 %, which amount is to be withheld by the payer upon payment of the winnings by the customer.

32. The Appellant submitted further two amendments were effected by parliament, one on 25th June 2018 vide Tax Laws (Amendment) Act , 2018 , which came into effect on 1stJuly 2018, amending the ITA definition of “winnings” to be “the positive difference between payouts made and stakes placed in a given month , for each player , payable to punters by bookmakers licensed under the Betting , Lotteries and Gaming Act”, and the second one on 21st September 2018 vide the Finance Act, 2018, which expanded the scope of “winnings” to cover other prizes.

33. The Appellant also relied in its submissions on the case of Pevans East Africa Ltd vs. Commissioner of Domestic Taxes TAT 304 of 2019, where the Tribunal held that winnings as stipulated in the ITA referred to pay-outs by the licensee but does not include amounts staked by the punter. This position was upheld by the High Court on appeal.

34. It was a submission of the Appellant that notwithstanding the legal position enunciated in the Pevans case (supra), the Respondent ignored the holding and assessed the initial WHT using the gross winnings instead of the net winnings, leading to an erroneous assessment of Kshs. 3,132,376. 00. For the period 2019 to 2022.

35. It was a further submission of the Appellant that it has appealed the said assessment on the basis that;a.The 2019 assessment was not valid; and,b.During the period of assessment, the Appellant was in a positive credit position.The detailed analysis as set out in the statement of facts and averments.

36. It stated that during the period January 2019 to October 2019, there was no legal provision enabling the Respondent to demand taxes not withheld a person who should have withheld the same, and there the Respondent could not demand taxes, which the taxpayer had not withheld, and which the taxpayer could not remit.

37. The Appellant also submitted that in the period November 2019 to December 2019, it had overpaid Wht by Kshs. 1,171,948. 77. 00, and therefore there is no outstanding tax liability by the Appellant for the period November to December 2019 as alleged by the Respondent.

38. It was also submitted by the Appellant that though the Respondent assessed an excise duty of Kshs. 3,767,494. 00 for the period 2019 to 2022, based on the calculations and reconciliation submitted to this Tribunal, the Appellant was assessed and paid all outstanding taxes in total the sum of Kshs. 1,925,818. 00, the Appellant used the tax workings based on the audited financial statements.

39. The Appellant further submitted that it prepared and had its Financial statements in accordance with the provisions of Section 709 of the Companies Act, and the international accounting standards, and used these financial statements to tabulate its tax liability, and remitted the same to the Respondent. It submitted that the Respondent admitted that it did not consider the Appellant’s audited financial statements but rather considered the information, explanations and documents provided, with records from the betting and gaming system platform.

40. The Appellant submitted that it has discharged its burden of proof to the required standard as provided by Section 56 of the TPA.

Appellant’s Prayers 41. By reason of the grounds aforesaid the Appellant prayed that;a.The Respondent’s demand for penalty dated 19th June 2023 for the years of January 2019 to May 2022 be set aside/struck out in its entirety;b.The respondents’ action to demand tax despite logical and cogent explanations being given to them be declared arbitrary, capreicious, unreasonable, unfair and contrary to the administration of justice and legitimate expectation of the Appellant.c.The Respondent, its employees, agents/other persons purporting to act on its behalf be barred and or estopped from demanding or taking any further steps towards enforcement or recovery of tax on the Respondent’s demand as stipulated above.d.The costs of this Appeal; and,e.Any other remedies that the Honourable Tribunal deems just and reasonable.

The Respondent’s Case 42. The Respondent’s case is set out in its;a.Statement of Facts dated 1st September 2023 and filed on 4th September 2023, together with the documents attached thereto; and,b.Written submissions dated 23rd February 2024 and filed on 26th February 2024.

43. The Respondent stated that it conducted an audit of the books, records, and accounts of the Appellant for the period January 2019 to May 2022 and following consideration of the information, explanations and documents provided by the Appellant, the Respondent issued the notice of assessment for withholding tax on winnings and excise duty for the period on 31st March 2023 in the sum of Kshs. 9,819,918. 00.

44. The Respondent stated that it had noted that the Appellant offered products which included sports betting and online casino, and it applied the rate of 20 % introduced by the Finance Act in 2019, and the rate of 7. 5 % for betting, gaming, prize competition and lotteries re-introduced in the Finance Act 2021.

45. The Respondent stated that its findings included that the ground of objection on withholding tax on winnings was not fully supported. It stated that the Respondent ought to have provided a detailed reconciliation of winnings for the period assessed and further, it was not evidently clear that the excise duty had been fully accounted for in the period under review. In the circumstances, its notice of objection was fully rejected by the Respondent, and consequently the additional assessment for Kshs. 9,957,916. 00 was confirmed.

46. The Respondent placed reliance on Section 2 of the Income Tax Act, which defines winnings as;“(2)Winnings includes winnings of any kind and a reference to the amount or the payment of winnings shall be construed accordingly .”

47. The Respondent placed further reliance on Rule 6 of the Income Tax (Withholding Tax) Rules 2001, which state;“Upon payment and deducting withholding Tax in any month, the person making the payment shall furnish the payee with a certificate showing the gross amount paid, the total deducted and such other information the Commissioner may specify.”

48. It was averred by the Respondent that contrary to the assertions by the Appellant, its charge to tax was based on the prevailing law and the withholding tax is rightfully due.

49. The Respondent also relied on Section 24 of the TPA which requires the Appellant to submit a tax return in the approved form and manner prescribed by the Commissioner, and further the Commissioner was not bound by that return, and may assess a taxpayer’s tax liability using any information available to the Commissioner.

50. The Respondent further stated that it is empowered by Section 31 of the TPA to amend the assessment based on the information available to it and to the best of its judgement.

51. It further stated that the documents in support of the objection were reviewed and information therein taken into consideration in establishing the correct tax liability in respect of excise duty and withholding tax.

52. The Respondent stated that the burden of proof is on the Appellant to produce the evidence challenging the Respondent’s decision to confirm the assessments which the Appellant failed to discharge in accordance with Section 56 (1) of the TPA.

53. The Respondent submitted that in the instant case, the winnings are the gross amount that the punter receives into their account, and there is no reference to stakes since no all form games of chance have stakes.

54. It was also a submission of the Respondent that Appellant’s position of “net winnings” is not envisaged under the ITA.

55. It submitted that contrary to the assertion by the Appellant, its charge to tax on the Appellant was based on the prevailing law and the Withholding Tax is rightfully due.

56. The Respondent submitted that the decision to demand additional WHT was to the best of the Commissioner’s judgement in line with the provisions of Sections 24 (2) and 31 (1) of the TPA and based on winnings and reconciliations availed by the Appellant.

57. The Respondent further submitted that the documents in support of the objection were reviewed and the information therein taken into consideration in establishing the correct tax liability in respect of excise duty and WHT. It asserted that its objection decision was rendered in accordance with the law.

58. The Respondent also submitted that the burden of proof is on the Appellant to produce the evidence challenging the Respondent’s decision to confirm the assessment which the Appellant herein has failed to discharge in accordance with the provisions of Section 56 (1) of the TPA.

59. The Respondent further submitted that from the foregoing its Objection Decision clearly enumerated the grounds for each assessment after consideration of the documents availed by the Appellant contrary to the Appellant’s contentions.

Respondent’s Prayers 60. By reason of the foregoing, the Respondent prayed that;a.The Objection Decision dated 19th June 2023 is proper and in conformity with the law; and,b.The Appeal lacks in merit and ought to be dismissed with costs to the Respondent.

Issues For Determination 61. The Tribunal having carefully considered the filings and submissions made by the parties is of the considered view that two issues commend for determination as follows:i.Whether the Respondent erred in determining, interpreting, ascertaining and computing what constitutes winnings in respect of the Appellant’s accounting period in review.ii.Whether the Respondent’s assessment against the Appellant for the period under review was justified.

Analysis And Determination 62. The Tribunal proceeds to analyze and determine the two issues as hereunder;

i. Whether the Respondent erred in determining, interpreting, ascertain and computing what constitutes winnings in respect of the Appellant’s accounting period under review. 63. The dispute giving rise to this Appeal arose out of an audit conducted by the Respondent on the Appellant’s books, records and accounts upon which the Respondent issued an assessment on 31st March 2023 on WHT on winnings and excise duty for the period January 2019 to May 2022 for the sum of Kshs. 9,819,918. 00.

64. The Appellant objected to the said assessment on the basis that the Respondent had misinterpreted what constitutes winnings in bookmaker’s transaction for purposes of WHT, and erroneously computing excise duty.

65. The Appellant is in the business of betting and gaming licensed by the Betting Control and Licensing Board, and provides an online platform to its customers through a website and mobile application, where customers log in into the system and can participate in various games as well as place bets on sports backed games or casino slots, and based on the outcome of the game, the customer may win or lose on the bet placed.

66. The Appellant averred that the process of betting/gaming commences with a punter loading his online wallet held with the Appellant with the amount required for placing bets, the punter places a bet of a certain amount of stake on the outcome of a certain sport, if the punter correctly predicts the outcome of the game wins the amount in stake, the Appellant reimburses the successful punter the amount placed in stake, and processes the winnings by the punter which is usually the amount after deduction of stake reimbursed to the punter, and which is subject of the relevant taxes. The amount staked by the punter is reimbursed in full free of any deductions.

67. The Appellant has submitted that “winnings” is defined under Section 2 of the ITA as;“Winnings include winnings of any kind and a reference to the amount or to the payment of winnings shall be construed accordingly.”

68. The Appellant also submitted that WHT is provided for under Section 35 (3) of the ITA as;“(3)Subject to subsection 3 A , a person shall , upon payment of an amount to a person resident or having a permanent establishment in Kenya in respect of winnings which is chargeable to tax , deduct therefrom at the appropriate resident WHT.”

69. The Appellant also submitted that the Third Schedule clause 3 (i) and 5 (i) of ITA provides for the rates of WHT at 20 %, liable to be withheld by the payer upon payment of winnings to a punter.

70. The Appellant further submitted that in the case of TAT 304 of 2019 Pevans East Africa Ltd vs. Commissioner of Domestic Taxes, the Tribunal held that winnings as stipulated in the ITA refer to payouts by the licensee but does not include amounts staked by the punter, and WHT is on the winnings.

71. The Appellant also submitted that in the aforesaid decision, it was held that there was no operative provision in legislation enabling collection of undeducted WHT from the payers.It stated that based on the foregoing, the Respondent cannot proceed to penalize ant taxpayer due to any alleged failure to withhold taxes, and consequently submitted that the Respondent ’s assessment for the year 2019 was not valid.

72. On the other hand, the Respondent while placing reliance on Section 2 and 35 of ITA, and Rule 6 of the Income Tax (Withholding Tax) Rules ,2001, submitted that “winnings” are the gross amount that the punter receives into their account, and there is no reference to stakes since not all forms of games of chance have stakes.

73. The Respondent also submitted that the Appellant’s position of “net winnings” is not contemplated under the ITA, and asserted that its charge to tax on the Appellant was based on the prevailing law and that the WHT is rightfully due .

74. In this dispute the parties have taken converse positions as to what constitutes winnings. Whereas the Appellant posits that winnings exclude the stake placed by the punter, meaning the amount the punter gained over and above his bet stake, the Respondent took the view that the term winnings refer to what is received from games of chance.

75. The Tribunal notes that indeed this question was settled in the case of HC ITA No. E003 of 2019 Commissioner of Domestic Taxes vs. Pevans E.A Ltd & 6 Others, where Majanja J. held that winnings are the Payments made to the punter less the amount staked. It this amount that is subject to tax and what the Respondents are obligated to deduct and remit to the Commissioner.

76. The Tribunal therefore in line with the holding in abovesaid case concludes that the Respondent erred in interpreting winnings to include the stakes placed by the punters, while ascertaining and computing the WHT the Appellant is liable to, thereby leading to an erroneous assessment for Kshs. 4,614,269. 00 in WHT on the Appellant.

ii. Whether the Respondent’s assessment against the Appellant for the period under review was justified. 77. The interpretation of winnings having been settled, the Tribunal is called upon to interrogate whether the Respondent’s assessment against the Appellant falls in line with the said interpretation.

78. It is noteworthy that this issue presents with two substrata; one, whether the assessment was within the realm of the legal definition of winnings and, secondly, whether the Respondent was entitled to demand withholding tax from the Appellant as payers that ought to have been withheld from punters, or ought to demand from the punters.

79. On the issue subject of winnings, it is clear that the Respondent based its assessment on the Appellant on its interpretation that winnings constitute the total amount received from games of chance, being the state placed by the punter and the winning on the bet.

80. On the foregoing basis alone, the Tribunal is satisfied that the Respondent erroneously computed the amount of WHT chargeable to tax on the Appellant.

81. On the second issue on liability to WHT, it was again settled in TAT 304 of 2019 Pevans EA Ltd vs. Commissioner of Domestic Taxes, that prior to year 2016, Section 35 (6) of ITA provided that the Commissioner could claim taxes from a payer who failed to make a deduction as though the taxes due from them. However, the Finance Act 2016 deleted the said Section 35 (6) of the ITA meaning the Commissioner could no longer demand taxes not withheld from the person who should have withheld the same. And this position persisted until the enactment of Section 39 (A) of the TPA vide the Finance Act 2019

82. Consequently, the Tribunal finds that the Respondent’s assessment for the year 2019 in nullified by this provision and the with respect to WHT for the year 2019, the Respondent could not demand and collect that ought to have been deducted by the Appellant from the punters, and all it can do is collect from the punters directly.

83. On the issue of Excise duty, the Appellant objected to the assessment in the sum of Kshs. 3,767,494. 00 on the grounds that it been assessed and the amounts outstanding paid in full, and secondly it had utilized its audited financial statements for its tax computations and the computations by the Respondent were based on draft figures from the system.

84. However, the Respondent in its statement of findings stated that its assessment was based on the stakes extracted from the Appellant’s betting platform, which subjected to excise duty taking into account the Tax Law amendments and the tax already paid, in which the total stakes places were Kshs. 315,108,836. 00 attracting a total excise duty of Kshs. 47,734,399. 00, of which a sum of Kshs. 43,966,905. 00 was paid, leaving a balance of Kshs. 3,767,494. 00 unpaid, and which was accordingly assessed and demanded by the Respondent from the Appellant.

85. The Tribunal also notes that the Respondent requested the Appellant for its reconciliations and supporting documentation on the amount of taxes alleged to have been remitted, which were provided and upon review found to be similar to the assessment without any variances for the period under review thus the Respondent confirmed the assessment.

86. Flowing from the foregoing, it is clear that the Appellant did not discharge its burden of proof by provided sufficient evidence to prove the Respondent’s assessment wrong or excessive in line with the provisions of Section 56 (1) of TPA and Section 30 of the TAT Act.

87. In view of the above the Tribunal finds and holds that the Respondent was justified in conferment the Excise Duty assessment in the sum of Kshs. 5,343,647. 00 against the Appellant.

88. The upshot of the foregoing is that the Appellant’s appeal partially succeeds and the Tribunal proceeds to issue the appropriate orders.

Final Determination 89. The Appellant’s appeal having partially succeeded, the Tribunal issues the following orders;a.The Respondent’s assessment for WHT in the sum of Kshs. 4,614,269. 00 in the Objection Decision dated 19th June 2023 be and is hereby set aside.b.The Respondent’s assessment for Excise Duty in the sum of Kshs. 5,343,647 in the Objection Decision dated 19th June 2023 be and is hereby upheld.c.The parties to bear their own costs.

90. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 28TH DAY OF JUNE 2024ROBERT M. MUTUMACHAIRPERSONELISHA N. NJERU MUTISO MAKAUMEMBER MEMBERBERNADETTE M. GITARI ABDULLAHI DIRIYEMEMBER MEMBER