Opinion: 50% Tax On Betting Is Punitive And Retrogressive

Some years back when I was active in the Private Sector mobilization under KEPSA I remember us holding many high level meetings with the then Ministry of Youth and Sports. One of the issues we discussed endlessly was about establishing a sports lottery to fund sports initiatives in Kenya. When the likes of Sport Pesa and Pambazuka National Lottery came up I thought the government had finally realised this goal. I was later to learn that these were initiatives by private sector and nothing to do with the government. The private sector had achieved what the government had discussed for ages and made a success out of it.

According to Business Daily: “Eight of the 25 licensed betting companies had paid a total of Sh4.7 billion in the financial years 2014/2015 and 2015/2016 respectively.” The recently proposed 50% tax on the revenues of these firms is retrogressive and will kill a nascent industry with a great promise. These firms are already heavy on CSR. Sportpesa for example has invested over KShs 800 Million in supporting various sports in the country. Why come with these punitive measures? While betting and gaming have negative impact on society, extremist tax policies are not the best approach.

Government can as well take the billions it is currently collecting from the sector and use them to promote sports and educate consumers on the risks of gaming. Parliament must not allow this proposal to pass. If the government so wishes it can invest in its own sports lottery instead of using this backdoor mode. Furthermore, such dramatic and disastrous policy moves will discourage investment in this country with adverse impact on employment and economic growth.

Who will invest in a country where government can just wake up and decide that 50% of your revenues belong to it? This is almost criminalizing the industry.

The Sports industry has a very huge capacity of creating employment for millions of our youths wallowing in lack and poverty. The government should look at the bigger picture and not be obsessed with how much they can collect from the industry. Imagine the lotteries sponsoring football leagues in all 47 counties for example. This will be good for talent development and for growth of the sport. Kenya will be producing many international players and giving hope to the youth.


Opinion by: ~ Ephraim Njenga



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