Gaming operators in the country are willing to dialogue with the government with a view to reduce the 35 per cent tax on gross gaming income.
They said over 10,000 jobs are at stake should the firms close shop and government stands to lose revenue if the businesses relocate to
other countries.
“The 35 per cent increase will lead to mushrooming of illegal gambling. This will force some of us to close down, relocate to foreign markets such as Tanzania where taxation is low or scale down operations,” Association of Gaming Operators of Kenya (AGOK) secretary Judith Kiragu said yesterday at a press conference.
They said they are also ready to review decisions regarding their withdrawing of sponsorship for sporting activities if the government agrees to lower the tax limits.
They
said the government was ill advised that higher taxes would discourage gambling since the taxation is not passed to the clients, the gamblers.
The operators are likely to migrate to Rwanda and South Africa where tax imposed on gaming activities are 13 per cent and 9.6 per cent respectively.
Last week, the association met with senior officials from the Ministry of Sports, Culture and Arts, but no decision about the way forward
was reached.
Kiragu said they are pushing for the previous tax limits of between five and 15 per cent across the gaming sectors, or a reasonable tax bracket, but not 35 per cent across all sectors.
Before the introduction of the new tax limit, lottery was taxed five per cent, sports betting paid 7.5 per cent, casinos paid 12 per cent while price competition was taxed at 15 per cent.
In addition to differentiation of tax across the gaming platforms, the operators are also pushing for regulation of the industry noting that there is an increase of amusement machines in the villages which is painting a dark picture for the gaming sector.
According to a recent report by consultancv firm Price Water Coopers, the new taxation on betting activities is the highest in the region and could hurt the growth of related sectors and government revenues.
The new tax regime came to effect this year.