The Kenyan government is looking forward to boost taxes collected from betting firms this year. Through KRA, the government is keen on making the industry favorable to some of the betting companies which had left. The move to reduce taxes on stakes is said to be a way of ensuring that SportPesa, BetPawa and Betin comes back to the country.
The former head of BCLB has come out speaking on behalf of the betting companies equating them to Banks and money lending institutions.
Antony Kimani Kung’u said there is a need for a serious rethink on betting sector taxation and a review of relevant legislation to include a determined revenue generation approach.
“We have to understand that this is neither a product nor a service industry. It’s a sporting industry in which winnings determine payout. Much of what is held by the industry players are individual investments of players or punters.
“No one would consider bank savings as the lenders’ overall turnover. Profits are calculated based on income and not investments or savings of account holders,” Mr Kung’u said.
He added that much of what is held by the stakeholders are individual investments of various players from which a legally acceptable percentage is retained.
At the same time, he pointed out, much of what is held in stakeholders’ accounts are investments for payouts to winners, “considering that taxation of investments is illegal and contravenes business principles”.
A number of gamblers had switched to internationally licensed sites that pay no taxes to Kenya to get more earnings after the government introduced a 20 per cent excise duty.
The taxman is now eyeing millions of shillings in revenue lost through offshore betting sites even as gambling operators peg their hopes on the recent scrapping of a controversial tax to make a comeback.
But SportPesa on its part still notes that they are yet to receive a go ahead and cannot issue a definite time when they will return in the country. However, their responses to their clients shows some hope that the betting company is also willing and working hard to launch their services back in the country.