Kenya Does About-Face on iGaming Tax
Kenyan President Uhuru Kenyatta recently signed legislation to remove the 20 percent excise tax on mobile sportsbook stakes, a levy that prompted operators Sportpesa and Betin to exit the market. One week later, it’s back.
Earlier this month, Kenyan President Uhuru Kenyatta signed legislation to remove the 20 percent excise tax on mobile sportsbook stakes—a tax doubled from 10 percent when last year’s finance bill was signed in September 2019.
The tax hike caused Kenya’s two largest operators, Sportpesa and Betin, to leave the market. That in turn motivated the National Assembly’s Finance and National Planning Committee to submit an amendment to remove it, saying it was leading online bettors to move to offshore operations “that were not subject to tax and thereby (denied) the government revenue.”
Now the government has reversed itself again, and decided the tax will be reintroduced in the next six months.
According to Gambling Insider, the removal of the controversial 20 percent sports betting tax constituted a “suspicious last-minute change” to the Finance Bill. Treasury Cabinet Secretary Ukur Yatani said though the tax was removed, the government had not reneged on its commitment to tax the betting industry.
“The removal of the 20 percent tax on bets staked is a cause of concern, and not celebration,” said Nelson Bwire, co-founder of the Gaming Awareness Society of Kenya. He said it would “open the floodgates for more betting companies and subsequently, more gambling addiction especially if public health measures to protect the youth from gambling harm are not in place.”
Committee meeting minutes cited by GI show that “an obscure stakeholder group, identified only by a non-existent URL as shade.co.ke” wrote to the committee on May 15 proposing that the tax be scrapped. “It has made many betting firms cash-strapped, hence cutting down on their sponsorships to local sports clubs,” the group said.
The committee agreed, noting that “the high level of taxation had led to punters placing bets on foreign platforms that are not subject to tax and thereby denying the government revenue.”