Kenya President intervenes in 50% tax row

Kenya’s President has intervened in the escalating row concerning the country’s planned 50% levy on gaming operators, suggesting his government may be willing to negotiate over the potentially crippling tax.

Last week, Treasury cabinet minister Henry Rotich delivered a blow to the gaming industry when he revealed plans to increase the tax to a uniform 50% rate from the current 7.5% applied to betting and 12% on gaming.

Rotich said the motivation behind the hike was to protect the young and vulnerable from gambling with the additional revenues raised to be channelled towards youth sports and culture projects.

However, speaking at a policy launch press conference yesterday, the country’s President, Uhuru Kenyatta, said the government would be willing to review the rate, although made clear he would rather the tax be “too high than too low”.

“It is a bitter pill but we were very concerned and I must be frank about this,” Kenyatta said. “We were concerned about the rise in betting, especially among our school going children.”

He went on: “Technology has been positive – it has had a very positive impact.

“But it also has its downside and we felt that, as a responsible government, we needed to ensure that we made it more difficult for more people to bet and, indeed, for those that wanted to bet that money should go to causes that are social in nature and benefit the very same young people.

“There has been a big cry from the gaming industry that maybe we have gone too high, but I would rather go too high than too low. So I would say let us engage, it is not our intention to kill your industry or your sector.

“And if indeed we are too high, we have a reasonable and responsible minister, a reasonable and responsible parliament – we can review this because the agenda is not to kill the industry but to take care of some of the problems that that industry has caused.

“But also to ensure a good portion – a good portion – of the incomes that are derived from that industry goes to help [the young] because at the end of the day it is a sin tax and we want that tax to benefit social causes in our country,” he added.

The Kenya-facing industry has fought back in recent days, with local operator SportPesa having filed a legal challenge against what it believes to be an unconstitutional measure – although local media agencies report a court judge today declined to hear the ‘urgent’ case due to the font on the filings being “too small” to read.

The Kenyan betting and gaming industry had become an attractive destination for foreign operators of late, with the likes of Betway and Dafabet having moved into the country while Colossus Bets had also been planning to launch in the territory.