The recommendation by Kenya’s National Finance and Planning committee to reduce tax paid by gambling operators has been dismissed by the country’s parliament.
The proposal, made as part of an appraisal of the Finance Bill 2018, sought to alter the 35 percent tax rate levied on operators as of the 1 January this year.
“Section 29A of the Betting, Lotteries and Gaming Act is amended in subsection one by deleting the expression thirty five and substituting therefore the expression fifteen,” said the report.
However, on the 31 August, following a week of debate concerning the country’s $30.1bn 2018/19 budget, the country’s ministers rejected the proposition, led by state treasurer and anti-gambling lobbyist Henry Rotich.
Originally backing a strategy to introduce a 50 percent uniform tax on operators in March 2017, Rotich was instrumental in introducing the increase from 7.5 percent to 35 percent, enacted by president Uhuru Kenyatta on the first day of this year.
The tax rise, which immediately forced SportPesa CEO Ronald Karauri to announce the withdrawal $5.8m worth of national sports sponsorship following “drastic cuts on our expenses,” was initially recommended for reduction by the NFP committee in June.
Intended as an attachment to the Tax Laws (Amendment) Bill 2018, the proposal was opposed by the Labour and Social Welfare Committee, with a similar recommendation by National Assembly majority leader Aden Duale recommending a 20 percent levy on winnings to offset lost revenue.
Though the tax reduction was dismissed, the levy on winnings is still under consideration by parliament, despite originally being proposed in a 2011 Finance Bill, repealed by the 2012 Finance Act, reintroduced in 2013, overturned and relaunched in 2015, and dismissed in 2016 due to implementation problems.
The ruling comes during a particularly restrictive period for Kenyan gambling operators, with the country’s Film Classification Board announcing recent plans to ban gambling advertising from 5am to 10pm nationwide.
Following a similar embargo by Australian authorities in March, the limitations cover all live sporting events, as well as those viewed via streaming services.
“KFCB will be stern on media houses that air betting and gambling adverts during the watershed periods,” said CEO Ezekiel Mutua.