Tax on Betting Companies May Settle at 35% After the President Rejects 15% Rate

Credit: Pokerfuse

President Uhuru Kenyatta has turned down the proposal to keep taxes for betting firms at 15%, and has directed the National Assembly to approve a 20 per cent bump to 35%. This comes after MPs, lobbyists and stakeholders argued that the 50% rate that was part an amendment of the Financial Bill 2017 would bring the lucrative industry to its knees.

The move to heighten taxes for sports and gambling businesses to 35% is likely to see another round of campaigns to bring those numbers as low as possible in a challenging period the taxman is patching all loopholes to ease budget constraints.

It should be noted that a bump to 35% will be felt (that’s more than double of what KRA collects from them). While  thousands of youths rely on the platform to support themselves (because, unemployment), the government makes its case by insisting on higher betting tax, in addition to taming the industry because of the idea that gambling is a major contributor to social ills especially among the youth. In fact, the President said no to the bill because the National Assembly edited out the clause that advised the youth to walk away from betting.

“The proposal, which read, “29. Section 59B of the Betting, Lotteries and Gaming Act is amended in subsection (1) by deleting the word “fifteen” and substituting therefore the word “fifty” was however dropped when Parliament passed the Bill,” Mr. Kenyatta asserted.

As stakeholders and members of parliament are deliberating on these concerns for an amicable consensus, betting firms are paying their taxes based on the old model of 7.5%. Other gaming companies, including casinos pay 12%, lotteries at 5% and prize competitions pay 15% as mentioned above.

MPs have till tomorrow to make a decision on this issue because their term concludes on the same day. Afterward, they will break for August’s polls. However, they can be summoned to parliament for emergency cases, meaning the issue could take some time to be fully addressed.

Sports gambling has seen an astronomical growth, a feat that has been fueled by well-priced data packages, wide adoption of favourably-priced smart handhelds, not to mention financial solutions such as Airtel Money and M-Pesa.