The Kenyan Parliament has shot down a controversial sports betting turnover tax bill. However, it is not clear, yet, whether the Kenyan President, Mr. Uhuru Kenyatta, is on board with the idea.
Last Tuesday, the Country’s national assembly passed the Finance Bill 2020, which directs how the Kenyan government will finance its budget in the next fiscal year, starting 1st of June. In the bill are mechanisms on the elimination of the controversial exercise betting tax that upended the Kenyan betting space last year.
This past summer, the Country’s betting and licensing board suspended several gambling operator licenses, including that of Betin and SportPesa, over allegations that the two and many others, owed the Kenyan government millions in unpaid taxes.
The friction arose from the government’s view that a 20 per cent tax on gambler winnings, suspended four years ago, and reintroduced two years ago, applied to the overall sum paid out to winners, which includes original stake, necessitating 20 per cent on turnover. Betin, SportPesa and several other aggrieved operators quit the Kenyan market rather than pay up.
Initially, the plan was to let the tax stay as part of the Finance Bill. Still, the Country’s Finance and planning committee felt it needed to go following consultations with an entity only identified as Shade.co.ke, whose identity is not known at all.
The other reason the committee scrapped the law was that the exit of operators from the Country causes massive job losses.
The Kenyan government also lost a lot in terms of tax as better shifted to international markets.
The committee was directed to lower tax on winnings, not the stake, to 10 per cent, after it found that this would not negatively affect operators.
Shade chose to scrap a digital service tax that had been introduced as well, whose aim was to collect tax from non-resident companies operating in Kenya.
SportPesa, and other operators, have not stated in regards to this development. They may be watching to see which way the president swings.