•MPs removed the excise duty on bets placed by stakers citing death of betting firms.
•Excise duty was introduced to discourage Kenyans from excessive gambling
The government plans to reintroduce the 20 per cent excise duty on betting within six months.
The provision was removed in the Finance Act, 2020 which was assented to by President Uhuru Kenyatta on June 30.
National Treasury Cabinet Secretary Ukur Yatani on Thursday said the tax was scrapped at the committee stage of the Bill.
This, he said, should not be misconstrued that mean the government has changed its position on the tax.
He said the government remains committed to mitigating the social vices associated with betting and the impact especially on the youth.
“Following consultations and in line with the government commitment, the National Treasury will be proposing to the National Assembly the reintroduction of the excise duty on betting within the next six months,” he said in a statement.
The government in 2018 introduced a 15 per cent tax on betting companies and 20 per cent withholding tax on punters winnings.
In 2019, it introduced excise duty on betting at 20 per cent of the amount staked.
Yatani said there has been constant pressure by players in the industry to reduce tax.
MPs at the Finance committee removed the tax after an unidentified firm said, “It has made many betting firms cash-strapped, hence cutting down on their sponsorships to local sports clubs.”
The committee conceded to the demand saying that the high level of taxation had led to persons placing bets on foreign platforms that are not subject to tax.
Lawmakers argued that the arrangement was counterproductive as it is denying the government revenue.
In their report, the MPs said that imposing the tax would “reverse the negative effects of the tax on the industry.”
“This has led to the closure of betting companies in Kenya yet international players continue to operate.”
Parliament is also one step away from passing the Gaming Bill, 2019, which seeks to introduce several taxes to be charged on operators.
Former Sports committee chairman Victor Munyaka who has been processing the Bill said it doesn’t have the excise duty component.
“Excise duty is a true killer as it affects the punters. It was good that the committee removed it. We should focus on taxing operators,” Munyaka, Machakos Town MP, said.