President Uhuru Kenyatta wants betting firms to be imposed with at least a 35 per cent in a bid to discourage young people from the vice
It is on this basis that he adamantly dissented the Finance Bill 2017 tax whose previous proposal to impose a 50 per cent tax on Betting firms was shot down by a Parliamentary Finance committee that recommended four percentages-5, 7.5, 12 and 15 per cent respectively
‘’The purpose of Amendment of Section 59 B of Cap 469 was to “discourage Kenyans, and especially the youth, in directing their focus on betting, lottery and gaming activities instead of productive economic engagement, a vice that is likely to degenerate into a social disaster,” Uhuru asserted in a memo to the Speaker of National Assembly, President Uhuru Kenyatta
The Treasury Cabinet Secretary proposed a hike in taxes payable by betting, lottery and gaming industry players from the current range of 7 to 15 per cent to a uniform rate of 50 per cent in his 2017/2018 Budget Statement, urging that it was meant to develop the country’s sports and arts
This proposal sparked operator outrage, with some firms challenging it in the court. However, their appeal was rejected on technicalities by Justice Roselyne Aburil.
According to the Association of Gaming Operators, the proposed tax would bring the gaming industry to its knees and give birth to illegal operators who will not pay tax to the government
The Chairman’s Association Ronald Karauri and CEO of SportsPesa urged the government to maintain the tax in the regional celling to ensure fair competition with their regional competitors.
He revealed that Tanzania charges gaming 15 per cent of gross revenue, Rwanda 13 per cent while Uganda plans to soon reduce the tax from the current 35 per cent to 20 per cent.
The tax hikes have been criticized by sports organizations, many of whom are sponsored by gaming firms and who fear the loss of this revenue stream if gaming operators are forced to cut costs.