Hike will still be hard to swallow
Kenyan President Uhuru Kenyatta has recommended that betting, lotteries and gaming activities in the country be taxed at 35 percent, a considerable increase from the 7.5 percent gaming companies now fork over.
While not as punitive as the 50 percent tax rate advanced in March by Treasury Cabinet Secretary Henry Rotich, the increase would still be burdensome for operators, including not only to sportsbooks but also the gaming, lottery and competition industries, which currently pay tax rates of 12 percent, 5 percent and 15 percent respectively.
Last week Kenyatta refused to sign the Finance Bill into law and offered the 35 percent across-the-board tax plan instead. The 35 percent rate was also proposed by Assembly Majority Leader Aden Duale in May; at that time, opponents claimed the increased rate would be enough to drive operators out of business.
Kenyatta said he rejected Finance Bill 2017 as it stood because parliament deleted a clause stating that the measure was designed to “discourage Kenyans, and especially the youth, in directing their focus on betting, lottery and gaming activities instead of productive economic engagement, a vice that is likely to degenerate into a social disaster.”
“This totally negates the spirit underlying the proposal to have the betting tax raised,” said Kenyatta.
CalvinAyre.com reported that Kenya’s “attempted tax grab” has inspired neighboring Uganda to also add new taxes. Under that plan, operators would pay a 20 percent tax on gaming revenue and gamblers would pay a 15 percent tax on winnings.
