Betting operators in Kenya have lost their latest attempt to lower the tax on gambling from 35% to 15%. Last Saturday, the Kenyan Parliament took a vote on the proposed gambling tax cut. In the end, the verdict said the Kenyan Parliament Rejects the Gambling Tax Cut.
According to the PPH experts, the tax cut proposal was created because of concerns about the current tax rate. This is because some believed that the current rate is hampering progress in the domestic gambling market.
This is the second attempt to decrease the new 35% tax rate which became law in June of last year. The first attempt to lower the tax was made in June of 2018 by the National Finance and Planning committee.
A Bleak Future for the Kenyan Gambling Industry
The increase gambling tax took place in June of 2017 when Uhuru Kenyatta, the President of Kenya, signed the new law. Thus, sportsbooks went from paying a 7.5% tax rate to 35% while casinos saw a 13% tax increase. In addition, lotteries went from saw a 30% tax increase and competitions games like raffles saw a 20% tax increase.
When the tax increase took place on January first of this year, several betting operations had to close their doors. In fact, SportsPesa, a large operator of sports betting platform threatened to withdraw from the country.
At the moment, SportsPesa remains in Kenya but stopped its sponsorships of local sporting leagues. However, they have made new deals with some groups at a lower financial commitment.
Oddly enough, the proposed tax cut was rejected despite 60% of its citizens opposed to the initial tax increase. News media outlet in Kenya report that State treasurer Henry Rotich was personally lobbying MPs to reject the amendment. However, this comes to no surprise for many since he originally supported a 50% gambling tax.