Betting firms are staring at a bleak future after President Uhuru Kenyatta disagreed with MPs on on the tax cap on their income. His proposal is that Parliament considers raising the rate to 35 per cent from 15 per cent. Why this is considered punitive is that additionally, betting firms pay income tax on any profit charged at 30 per cent.
Simply put, the government will be taking more than half of the revenues earned by Kenya's newest entrepreneurs. This can only be described as a misinformed policy decision that runs counter to plans to promote business and enterprise.
It is understandable that the State is aggressively looking for new areas to grow the tax base to fund an ever growing need and betting, a new fad in town provides the easy target. But isn't it prudent that sectors that contribute significantly to the tax kitty are nurtured and not chocked to death by needless regulations? Aren't we punishing success therefore?
The intended outcome of the aggressive move is to tame the industry, which the State thinks is the root of all social ills. But how levying heavy taxes on the companies' revenues will address this is a matter of conjecture. Though
For clearly, the winnings by individual gamers are not the target of the planned taxation measure. A fair assessment of the proposals is that the government is only out to discourage new investment in the sector while doing little to promote responsible behaviour among the gamers it claims to want to protect from the modern-day buccaneers.
With a strained economy and high levels of unemployment, the least that anyone wants is an act that would threaten the goose that lays the golden goose or send the wrong signals to potential investors.
It is comforting though that MPs could still have their way. They would do well for themselves and the country to reject the proposals sent by the President and stand by their earlier position to retain the tax rate at 15 per cent.