Kenya operators again plead with government over heavy gambling tax

The trade body Association of Gaming Operators-Kenya has again appealed to the Kenya government to shelve its 35 percent across-the-board gambling tax.

Association Secretary Judith Kiragu appealed to government to return to the previous tiered system of taxation, which took into account the differing forms of gambling and infrastructure.

She also explained that online sports betting and gaming companies must pay for software providers among other charges based on the percentage of revenue, and said the new tax will make business unsustainable.

Before the imposition of the 35 percent gambling tax lotteries were taxed five percent, sports betting 7.5 percent, casinos 12 percent and price competitions 15 percent. This gaming tax is levied in addition to all other taxes that corporates in the country pay, including a corporate tax of 30 percent and other differentiated taxes on individual sectors like lotteries.

Operators note that the government’s justification for imposing the tax was to discourage problem and underage gambling, but contend that the tax hike will not achieve this because the increase is not passed on to clients, unlike the other sin taxes, but has to be borne by the operator if he or she is to remain competitive.

Operators argue that ultimately the tax makes their businesses as currently structured unsustainable, which may lead to company shutdowns and the loss of jobs.

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