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.
Finance Bill
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.
They actually pay 30% corporate tax as normal companies do but on top of that, they have to pay 35% of their REVENUE… not even Safaricom or EABL being the highest corporate taxpayers can stand such without going under. I honestly think it is really wrong.
If it is so as to curb the effects of gambling, they should also apply the same tax to alcohol and tobacco making companies.
I Think ‘someone’ wants to make these companies close shop so that they can ‘reverse’ the bill and start their own companies. Consipiracy theories manenos…
I insist they cannot, ni vitisho baridi. If the government shuts down their mobile money paybill numbers then the party is over for sportpesa. I doubt their other markets are as lucrative as Kenya. Instead of thumping their chests, they should be lobbying for the law to be amended.