The sports betting operators in Kenya thought they had managed to dodge the punitive tax increases but the Kenyan President says “not so fast”.
Towards the end of last month, the Kenyan parliament voted against the proposal to execute a 50% tax on all online gambling revenue. More so, this proposal was going to significantly affect online sports betting operators as they have only been paying 7, 5% tax on gambling revenue.
The President of Kenya, Uhuru Kenyatta flipped the MP’s proposed bill by refusing to sign the bill into law. When speaking to the speaker of the NA (National Assembly), the President said that the proposed tax hike on gambling revenue was necessary. In addition to that, he said it would assist to curb the involvement of the youth in online gambling activities.
Amended Tax Bill – Kenya
Nonetheless, Uhuru Kenyatta has offered the parliament another way that will ensure that the amended bill will meet with his proposal. He proposed to impose a new 35% tax hike on Kenyan gambling revenue. However, this will not only apply to betting operators but also to online casino gaming sites, online lotteries, promotions and competitions. These operators are currently being charged 12%, 5% and 15% tax, respectively.
The initial proposed 50% tax increase was strongly opposed by the Kenyan licensed gambling operators. They insisted that the punitive hike is contrary to its stated aims. By this, they meant that the parliament is making the online gaming industry of Kenya unprofitable while encouraging illegal online gambling sites to flourish.
The 35% increase rate of tax was introduced in the last month’s parliamentary negotiations over the Finance Bill. But they rejected the compromise of 35% as still being too much for Kenyan online gambling sites to make profits.
The attempted tax grab in Kenya has not gone unnoticed in neighbouring countries such as Uganda. In Uganda, the government has forced both, the online gambling players and operators to share the tax burden.
Under the Ugandan proposal, the gambling operators will be charged 20% tax on the gambling revenue whilst online gamblers will be charged with 15% tax on any of their gambling winnings.
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