The Kenyan government has signed a new finance bill, which affirms that Kenyan operators will evade tax hike for at least a year. President Uhuru Kenyatta signed the bill into law that the excise tax on betting should remain 7.5%. However, operators will face a new tax on their marketing spend.
Previous attempt had been made by the government to increase the excise tax to 20%. Moreso, there was an introduction of a 15% excise tax on advertising spend. The excise tax however was restored to 7.5% after a critical review of the bill by the Finance and National Planning Committee.
The reason for the restoration of the 7.5% tax bill stems from the fact that its success had not been properly examined. This is because it has only been implemented for less than a year.
It was critically reviewed by the parliament and MPs agreed to keep the tax at 7.5%. However, a 20% tax was reinstated on marketing spend.
The country’s excise tax on stakes has been a major point of controversy in recent years. It began in 2019 when the treasury raised the rate from 10% to 20%.
Before this increment there was a dispute over a 20% tax on player winnings. The subsequent increase of excise tax was the last straw that broke the camel’s back. Market leaders, Sportspesa and Betin halted their operations due to the increment.
Nevertheless, this tax increment became burdensome and affected the revenue from tax negatively. This led to a proposal to reduce the tax which was passed into bill in 2020.
The reduction was much to the displeasure of Treasury Secretary Ukur Yatani who announced that the government was working to reinstate the increment. An attempt was made with the initial version of the 2021 finance bill but was unsuccessful. Infact, the excise tax was further reduced to 7.5%.