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The government of Kenya has concluded plans to reintroduce taxation of betting companies within six months following a public outburst over cancellation of the 20 percent duty in the Finance Bill 2020.
Ukur Yatani, Treasury Cabinet Secretary heaped blame on the Parliament, referencing lobbying of government for the removal of the taxes.
Mr. Yarani said, “The players in the industry have been petitioning the government to reduce taxation in the industry,”
“The removal of this tax happened during the committee stage of the bill…The National Treasury will be proposing to the National Assembly the re-introduction of the excise duty on betting within the next six months.”
Kenya ceased taxing betting firms after a proposal on May15 by an unclear stakeholder group, identified only by a non-existent website shade.co.ke.
The parliamentary committee said the reversal became necessary after it has been noted that the industry was impacted by the taxes which has caused the closure of local companies while international players continue to thrive.
In recent times, betting has become prevalent in Kenya due to technological advancement such as mobile payments and digital applications which have enabled emergence of a multi-billion industry.
According to its financial statements, SportPesa Global Holdings, a foremost betting company reported an after-tax profit of Sh1.6 billion in 2018
In 2018, the National Treasury introduced a 15 percent tax on betting companies and 20 percent withholding tax on all winnings.
Last year, the government again introduced additional taxes in the, by way of a 20 percent excise duty charge on any amount staked.
This saw the government and the betting industry face off in a move that led to SportPesa losing its betting licence last July before it withdrew from Kenya last September in response to what it called “the hostile taxation and operating environment in the country”.
Their withdrawal resulted in 400 job losses and cancellation of its local sports sponsorships.
The withdrawal of the excise duty tax has coincided with restructuring of ownership at SportsPesa sparking insinuation the company is about to reemerge.
Source: CGTN Africa
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.