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The members of Kenyan parliament have vetoed a proposal to reduce the country’s gambling tax to 15 from 35 per cent. This is a blow to Kenya’s betting operators, who have been trying hard to reduce the tax rates. They have succeeded in pressurizing the country’s finance ministry to propose a Finance Bill that would have reduced the 35 per cent tax on gambling revenue to 15 per cent while also reducing gambling operators’ payments to social causes. However, the legislators intervened to maintain the existing system.
On January 1, Kenya’s new uniform 35 per cent tax on all gambling revenue kicked in, creating a harsh new economic reality for the nation’s betting, lottery, gaming and competition operators, who previously paid tax rates as low as 5 per cent (lotteries) or 7.5 per cent (betting).
State treasurer Henry Rotich was said to have personally lobbied MPs last week to reject the amendment recommended by the National Finance and Planning committee. Rotich’s efforts would not have come as much of a surprise, given that he originally supported a 50 per cent gambling tax before cooler heads prevailed.
This is the second defeat for efforts to roll back the new 35 per cent rate, following the National Finance and Planning committee’s bid to attach the proposed 15 per cent rate to the Tax Laws (Amendment) Bill 2018 in June.
The new 35 per cent tax resulted in some Kenyan operators closing their local operations, while leading betting operator SportPesa scrapped its lucrative sponsorships of local sporting bodies, although it recently inked new deals with some leagues at a lower financial commitment.
The future for Kenyan operators looks even more gloomy after the local media regulator warned that it’s planning to enforce “stern” rules on operators’ ability to market their wares during periods when children might be watching, which the regulator suggested means pretty much anytime the sun is shining.
Source: calvinayre.com
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