Overtaxing betting firms is detrimental to the economy

Sportpesa CEO Ronald Karauri hands over a dummy cheaque to Sportpesa Jackpot winner. [File, Standard]

Tackling the country’s gaping budget deficit is going to hurt. So, here is a question for Treasury: What would hurt more, introducing punitive taxes on industries that are seen to be booming like betting or reducing government spending on non-priority projects?

Economics tells us that targeted, punitive tax increases like the ones aimed at the betting industry hurt the economy immediately by reducing demand. Increase taxes, and Kenyans would have less money to spend. In most cases, consensus has been reached and amicable middle grounds arrived at after honest debates on the pros and cons of any taxation regimes being put forward.