Kenyan operators escape tax hike as Finance Bill becomes law
However, operators will face a new tax on their marketing spend.
President Uhuru Kenyatta signed the bill into law, ensuring that the excise tax on betting stakes remains at 7.5%.
The treasury had previously attempted to change this rate to 20% and introduce a 15% excise tax on gambling advertising spend.
However, after review from the country’s Finance and National Planning Committee, the rate was restored to 7.5%.
At the time, it said that the current 7.5% rate had been in place for less than one year, so there had not been enough time to judge if it had been a success.
In addition, the committee also threw out a tax on gambling advertising spend, similar to an existing tax on marketing spend for alcohol.
When considered on the floor of parliament, MPs agreed to keep the tax on stakes at 7.5%. However, they reintroduced the tax on marketing spend, at 20%.
After parliament and the senate passed the bill, it was sent to Kenyatta, who signed it into law.
The country’s excise tax on stakes has been a major point of controversy in recent years, starting in 2019 when the treasury raised the rate from 10% to 20%.
After this increase, which itself had come on the heels of a long dispute over a different 20% tax on player winnings, came into effect, local market leaders Sportpesa and Betin both withdrew from the market.
In 2020, though, the Finance Committee proposed lowering the rate, noting that tax revenue had actually decreased because of the onerous taxes. This proposal was accepted and became part of the 2020 Finance Bill.
However, treasury secretary Ukur Yatani then immediately announced that the tax should never have been scrapped and that the government was working to bring it back.
It took steps to do so with its initial version of the 2021 Finance Bill, which would have raised the rate back to 20%. However, the Finance Committee again made changes, this time reducing the stake levy to 7.5%.