The new law raising taxes on gaming to 35 per cent has been challenged after a betting firm filed a case challenging same.
Bradley Limited, which runs Pambazuka national lottery, says the effect of the new law is that betting firms will be paying 100 per cent taxes if all the costs incurred are factored in.
Only recently, President Uhuru Kenyatta asked Parliament to reduce tax from 50 per cent to 35, which is still not suitable, according to betting firms.
Betting firms used to pay 7.5 per cent tax before the raise.
The firm now wants the law allowing the tax raise declared unconstitutional.
Also sought is an order to declare the imposition and application of betting tax at 35 per cent of the monthly turnover as unfair and unlawful.
The firm termed the tax unconstitutional based on fact that the taxes being complained off are only charged on the betting industry in exclusion to other business sector and no justifiable cause being given.
According to the firm’s manager, Paul Muchene, the new law will eventually cripple the fast growing industry.
The firm noted that the heavy tax burden it is expected to shoulder does not remedy anything except negatively affecting business.
“Further and assuming that betting lotteries and gaming cause negative social effects, the imposition of the offensive taxes subject of this petition and increase thereof to 35 per cent of the gross turnover of the various industry players, would have no effect on controlling or reducing participation as the said taxes are chargeable only against betting company,” read the suit papers in part.
The court was also told to take note of the fact that betting firms are funding, through sponsorships, sports initiatives, teams and programmes.