Kenya Lawmakers Deny Request for Bringing Gambling Tax Down to 15%
According to a report published by a local newspaper, the gambling operators in Kenya have yet again had their proposal of making amends to the country’s existing taxation regime of 35% on the gambling revenue rejected. A local media outlet called Daily Nation released a report stating that the members of the parliament in Kenya had passed a majority vote giving thumbs down to the proposed amendment in the latest Financial Bill.
In their proposal, the local gambling operators had requested the government to reduce the 35% tax on gambling revenue down to 15%. In addition to this, the proposal also called for a reduction in the payments that the gambling operators are required to make towards social causes.
Back in the first week of January, the new taxation regime came into force in Kenya that required all local operators to pay a uniform 35% of their gross gaming revenue in taxes to the government. The betting, competition, gaming, and lottery operators that earlier paid taxes as low as 7.5% in betting and 5% in the lottery were now faced with harsh economic reality.
In the Daily Nation report, it was revealed that the state treasurer Henry Rotich tried to personally convince the country’s MPs to go on and reject the recommendation that had been made by the National Finance and Planning Committee. However, this doesn’t come as a surprise given the fact that at one point in time, Rotich had actively lobbied for 50% gambling tax before the more liberal regulators stepped in.
Back in June, the National Finance and Planning committee had showcased a proposal for attaching the 15% tax rate to the Tax Laws (Amendment) Bill 2018. That being said, this is the second time that the committee’s efforts on rolling back the exorbitant tax rate of 35% had been stalled.
Following the announcement of the 35% tax rate, many gambling operators in Kenya went ahead and shut down their facilities. In addition to this, one of the most highly revered betting operators in Kenya, SportsPesa, withdrew some very lucrative sponsorships with the local sporting associations. However, it did go on to sign new agreements with a couple of other leagues, albeit for a smaller fee.
The future of the gambling operators in Kenya seems to be very bleak given the fact that a Kenyan media regulator recently revealed that it might enforce stricter rules to limit the operators’ ability to advertise their brands in periods when children are more likely to watch the TV.