Kenya provides amnesty to bookmakers lowering tax rate to 7.5%

The fate of Kenya’s sports betting industry has been revived following President Uhuru Kenyatta’s signature of a 7.5% tax on gambling wagers.

The tax measure was contained within the Kenyan Revenue Authority’s (KRA) revised ‘Finance 2021 Bill’, which saw the government modify its federal taxes on gambling and telecom sectors.

Securing its presidential approval, the KRA has agreed to lower Kenya’s blanket 20% wagering tax imposed on all gambling verticals.

The controversial tax charge had been approved as a measure of Kenya’s 2020 Finance Bill, which was suspended following a last-minute injunction by a Nairobi High Court that demanded the KRA justify the ‘doubling of tax rate that had originally been settled at 10%’.

Under pressure to sign-off Kenya’s 2021/2022 National Budget, Kenya’s government ordered Treasury Secretary Ukur Yattani to undertake a review of business tax rates.

Yattani’s Finance Committee recommended the KRA to impose a blanket 7.5% wagering tax on all gambling verticals, including lotteries, a measure that should be approved as an amendment to the Finance Bill requiring President Kenyatta’s ascent.

Despite being endorsed by the Finance Committee, Kenyan gambling held no guarantee of securing the President’s approval – as Kenyatta had become a vocal opponent of the gambling sector.

For a number of years the Kenyatta government had ordered market leader SportPesa and others to pay the KRA a reported KSH 60 billion in unpaid taxes related to charges on player winnings.

Disputes between the Kenyatta government and the sports betting sector were brought to a boiling point in 2019, as national telecoms and banks were ordered to terminate all business services for licensed bookmakers.

Kenya’s regulatory uncertainty saw a number of bookmakers, including SportPesa, exit the market. However, in 2020 Sportpesa would return under the new ownership of Milestone Games and have  its licence immediately suspended by the Betting Control and Licensing Board (BCLB) 

Despite continued regulatory uncertainty, Kenyan sports betting has welcomed new incumbents joining its marketplace.

At the start of 2021, Betsson AB launched its Betsafe Kenya brand in partnership with BCLB licensed incumbent Bet High Kenya.  Upon its entry, Betsson outlined its commitment to sustainable growth within Kenya, launching and promoting the market’s first safer gambling programme for players.

 

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