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- Jan 20, 2016
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Gaming firm SportPesa will close its Kenyan operations and move to other jurisdictions should the law prescribing a 35 per cent turnover tax for the industry remain in force.
The firm is considering shifting base to Tanzania or the United Kingdom (UK) in a move that could lead to loss of tens of jobs.
SportsPesa Global chief executive officer (CEO) Gerasim Nikolov said the company can no longer operate profitably under the current taxation regime.
“There is nowhere in the world where such a huge tax is levied on turnovers and even here in Kenya, no firm can survive today if a 35 per cent tax was put on its turnover.
"Unfortunately, the ultimate effect of us shifting operations from here will be wide considering the various business that depend on this industry,” said Mr Nikolov at a media briefing Friday.
President Uhuru Kenyatta signed the Finance Bill 2017 into law imposing a uniform 35 per cent tax on all gambling revenue – betting, gaming, lotteries and prize competitions.
Before, licensed sports betting operators had been subject to a 7.5 per cent betting tax.
The government had targeted to reap higher tax revenue from the fast-growing industry and at the same time deter minors from getting addicted to gambling.
SportPesa Kenya CEO Ronald Karauri, however, said the tax cannot discourage betting as it has no direct impact on participants’ earnings as is the case with other sin taxes like excise levy.
“You cannot run a business just to pay tax to the government. It is not worth the sweat and were we not present in the UK and Tanzania, we would just wind up. I don’t think the government will benefit either because this is a death sentence to the whole industry,” said Mr Karauri, who also chairs the Association of gaming Operators (AGOK).
UPDATE:
SportsPesa denies plan to exit Kenya
The firm is considering shifting base to Tanzania or the United Kingdom (UK) in a move that could lead to loss of tens of jobs.
SportsPesa Global chief executive officer (CEO) Gerasim Nikolov said the company can no longer operate profitably under the current taxation regime.
“There is nowhere in the world where such a huge tax is levied on turnovers and even here in Kenya, no firm can survive today if a 35 per cent tax was put on its turnover.
"Unfortunately, the ultimate effect of us shifting operations from here will be wide considering the various business that depend on this industry,” said Mr Nikolov at a media briefing Friday.
President Uhuru Kenyatta signed the Finance Bill 2017 into law imposing a uniform 35 per cent tax on all gambling revenue – betting, gaming, lotteries and prize competitions.
Before, licensed sports betting operators had been subject to a 7.5 per cent betting tax.
The government had targeted to reap higher tax revenue from the fast-growing industry and at the same time deter minors from getting addicted to gambling.
SportPesa Kenya CEO Ronald Karauri, however, said the tax cannot discourage betting as it has no direct impact on participants’ earnings as is the case with other sin taxes like excise levy.
“You cannot run a business just to pay tax to the government. It is not worth the sweat and were we not present in the UK and Tanzania, we would just wind up. I don’t think the government will benefit either because this is a death sentence to the whole industry,” said Mr Karauri, who also chairs the Association of gaming Operators (AGOK).
UPDATE:
SportsPesa denies plan to exit Kenya
