Assault on betting firms is a misdirected endeavour

Interior Cabinet Secretary Fred Matiangi addresses a congregation at Nyabonge SDA Church in Kisii County on June 29, 2019. He has launched crackdown on betting firms. [Sammy Omingo/Standard]

Figuratively, Interior Cabinet Secretary Fred Matiangi has been breathing down the necks of betting firms. At the centre of it all is the matter of taxation. Governments are adept at exacting their pound of flesh, which is why Matiangi’s zeal and energy against betting firms validates Ronald Reagan’s opine; “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it”. The Jubilee government has done enough of that.

Though it is an indictment of the Government’s ability if indeed betting firms have defaulted on tax compliance, many of the firms can afford to hide behind the Double Tax Agreement. A firm headquartered in, say, Mauritius, operates in Kenya as a subsidiary. While such a firm is required to pay tax of between zero and 3 per cent back home, it can argue that being taxed in Kenya is double taxation.  Still, corruption within the Kenya Revenue Authority (KRA) has consistently made it fail to meet its own tax targets.

Recent developments at KRA that led to the arrest of a number of its staff members for collusion with firms and individuals to evade, or underpay taxes demonstrate how porous our tax regime is. Indeed, KRA lacks capacity to track individuals, companies and firms that fall within the tax bracket; which is why hundreds of thousands of Kenyans, importers and exporters don’t pay or file their tax returns and have no fear of being of being tracked.  It is a systemic failure.

Ordinary citizens

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Today, indicators point to a government in the financial red. From undercutting county governments in budgetary allocations to staggered, often delayed remittances and failure to initiate development projects, the Government appears besieged.

It has tried every conceivable thing, even coming up with preposterous tax proposals to raise extra funds, but to no avail. As a consequence, ordinary citizens bear the cost of government indiscretions regarding foreign debt. Warnings about excessive foreign debts might have fallen on deaf ears, but the consequences are stalking us.

The deportation order against 17 directors of betting firms, as was the case with Kenyan born lawyer Miguna Miguna, is a desperate measure to defeat justice. It is not lost on government mandarins that a liberal Kenyan justice system; though susceptible to abuse, would have issued injunctions had the deported directors been given the opportunity to seek redress in court.

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Rightly or wrongly, some people now believe Kenya is becoming an authoritarian State. While individuals run the show, institutions are weakened. This is demonstrable in the way the Security, Agriculture and Education ministries are managed.

Kenya is in a crisis of management as the ruling party is set for self-immolation. This arises from internal power struggles that detract it from the core function of giving the country direction.

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Educated youth

Kenya is beset by many problems, yet all, with just the right mix of political goodwill, can be overcome. And as Ronald Reagan once said; “In this present crisis, the Government is not the solution to our problems, Government is the problem”.

The solution to this crisis can, in part, be found in the counsel of Thomas Jefferson, the third president of the United States of America between 1801 and 1809. Inter alia, he once said; “We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude”.

It is not betting that has led Kenyan youths astray. Rather, it is the Governments ineptitude and tolerance for corruption that has pushed frustrated, yet highly educated youth to betting. Where government is all gloom, betting offers hope, even though false for the most part.

In stating that “Government exists to protect us from each other.  Where it has gone beyond its limits is in deciding to protect us from ourselves”, Ronald Reagan speaks for us today.

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Betting is an optional, personal choice, as much as going to church is, yet I have not seen any church deregistered for asking (some even dupe) congregants into paying tithes and offerings every Sunday, or for failing to remit tax or fill tax return forms.

While people have the inalienable right to make their personal choices as long as they are not in conflict with the law, focus should now shift to the present day churches, many unregistered, that are milking Kenyans dry to enrich a few.

Under the second pillar of its manifesto; Uchumi/Economy, Jubilee has performed dismally. It should stop looking for shortcuts and excuses just to vent its frustrations on the citizenry; do some soul searching and determine where it got derailed. Armed with such knowledge, the situation can still be salvaged ahead of the 2022 epic battle for the right to plunder the county’s resources.

Mr Chagema is a correspondent at The Standard. [email protected]

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Fred MatiangiInterior Cabinet SecretaryBetting firmsSportpesa