Kenya set to revoke controversial 20% turnover tax

Kenya’s National Assembly has voted to scrap the controversial 20% sports betting turnover tax that led to operators SportPesa and Betin pulling out of the market.

The turnover tax was implemented in Kenya’s 2019/20 financial budget and saw SportPesa slam the decision, stating the tax hike was “based on a fundamental misunderstanding of how revenue generation works in the bookmaker industry”.

The move to revoke the tax was proposed by a Kenyan entity, Shade.co.ke, which argued that the decision had caused operators to make cutbacks, including to lucrative sponsorship agreements with local sports clubs.

The National Assembly’s Finance and National Planning Committee responded to Shade, saying: “The reason behind [removing the tax] was that the high level of taxation had led to punters placing bets on foreign platforms that were not subject to tax and thereby denying the government revenue.”

The Committee went on to suggest that a reversal on the 20% tax rate would negate the negative impacts that had been recorded so far via its implementation.

Committee chair Joseph Kirui Limo argued during the debate that the removal of the tax “is going to enhance revenue because currently revenue is going down”.

Although the National Assembly has waved through the legislation, Kenya President Uhuru Kenyatta has to receive the bill and make an executive decision.

In the past, Kenyatta has been a vocal opponent of gambling. According to local media reports, Kenyatta said: “We have this thing called gambling and it’s so bad, I alone can’t finish it – go change the constitution.”

Earlier this month, Betsson Group announced a multi-year sponsorship deal with Kenyan football teams Gor Mahia and AFC Leopards, who will feature the firms Betsafe brand on their home shirts.

The Malta-based operator is expected to make a full market entry with the Betsafe brand within the next couple of months.