The National Treasury will ask the National Assembly to re-introduce excise taxes on all bets placed, setting the stage for renewed clashes between the government and players in the multi-billion shillings sector.
This comes a few days after President Uhuru Kenyatta signed the Finance Act 2020 into law, scrapping the 20 per cent excise duty introduced last year, as part of efforts to regulate gambling and boost government revenue.
The move prompted public outcry with Kenyans taking to social media to accuse the State of backtracking on the levy introduced six months ago.
National Treasury Cabinet Secretary (CS) Ukur Yatani, however, said the State remains committed on taxing the sector, blaming members of the National Assembly for the policy reversal.
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“The removal of this tax happened during the committee stage of the Bill,” said Yatani in a press statement released yesterday.
“Following various consultations and in line with the government’s commitment on mitigating against the social vices associated with betting activities, the National Treasury and Planning will be proposing to the National Assembly the re-introduction of the excise duty on betting within the next six months.”
Last year, BetIn and SportPesa, two of the leading betting firms in the country, closed shop following protracted court battles with the Kenya Revenue Authority over various tax disputes.
While pushing for the introduction of additional tax measures in August last year, Interior CS Fred Matiang’i said the betting firms owe the exchequer more than Sh26 billion in backdated taxes, and threatened to immediately deport any foreigners engaged in the business under falsified work permits. The sector has also been lucrative for telecommunication service providers, with Safaricom last year saying the State ban on betting cost the company Sh1.9 billion in revenues last year.
Mr Yatani says betting companies have petitioned the government over the past two years to have the taxes, including a 15 per cent on betting firms and 20 per cent withholding tax on winnings, removed.