The Government has warned that it will withdraw the licences of all betting companies for failing to pay taxes.
Interior Cabinet Secretary Fred Matiang’i revealed that betting firms generated at least Sh202 billion in revenue last year, but only remitted Sh4 billion in taxes.
Speaking after a meeting with the Betting Control and Licensing Board (BCLB), Mr Matiang’i said renewal of the firms’ licences would be subject to proof of tax compliance.
“Effective July 1, 2019, all betting licences in the country stand suspended unless the holders have paid all their taxes. None will be renewed for those who fail to comply,” said Matiang’i.
The CS said statistics showed that Kenya was leading in the continent in betting, with about 76 per cent of the youth actively involved in one form of gambling or another.
He noted that 54 per cent of these youths were from low-income backgrounds.
“We have about 500,000 of our young people who have been blacklisted by some of the lending agencies because they borrowed and cannot pay,” Matiang’i stated.
The CS, however, did not say whether all the youths borrowed money to gamble or to fulfill other financial obligations.
Customers who have been blacklisted by lenders and want to be de-listed are required to repay their loans and apply for a clearance certificate from the Credit Reference Bureau.
Matiang’i instructed the BCLB to convene a meeting with the Communications Authority of Kenya (CA) and review betting advertisements, further proposing that media houses should also be held to account for the gambling commercials they run.
The CS further directed the board to provide him with a comprehensive status report on the betting situation in the country, complete with a profile of all the agencies involved, within 30 days.
“I have instructed the Immigration PS and director to be involved to ensure that anyone who is involved in this exercise, especially those who are not citizens of our country, are properly documented and they have the right papers to be in our country.
“Where they are not, the law should take its course immediately and we should call them to account. We cannot run a sector where we are indirectly supporting money laundering in some kind of disguised way where it looks like they are doing the right thing,” said Matiang’i.
The CS said the Government intended to draft a Bill to properly regulate the betting sector, adding that stakeholders should be ready to participate in the process by giving their views on proposed policies.
“This is a sector we must regulate and I want to be very frank with you; we are prepared to face whatever consequences there may be to ensure this is done effectively."
He, however, noted that there were gaming companies genuinely involved in corporate social responsibility (CSR) activities, which he assured of his ministry’s support and protection.
The owners of betting and lottery companies told Matiang'i that ever since tax was imposed on winnings in 2017, it had proved difficult to take part in CSR programmes.
Peter Njoroge of the Kenya Charity Sweepstake (KCS) said the levies imposed and their contributions to charity amounted to double taxation.
He argued that KCS was started by President Jomo Kenyatta to help eradicate poverty, disease and ignorance, but heavy taxation interfered with its mandate.
"We ask that you waive the tax on lotteries because the industry is being destabilised," said Mr Njoroge.