Kenyan parliament blocks tax reprieve proposals

Casino Review
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The Kenyan Government has refused to bow to pressure from casino, sports betting and tourism leaders and declined a review of its calamitous gaming tax framework.

It would seem that the voice of reason has not yet reached the Kenyan parliament as MPs have blocked the wholesale reviews of its gaming taxation framework, despite widespread protestations about the negative impact it currently has.

Operator protestations, threats of market withdrawals and general condemnation of the blanket 35 percent levy on revenue had begun to gain support amongst ministers but a majority ruling has put end to any progress made.

The government has now doubled down on its belief that the revenue tax and 10 percent take of player winnings can help fill holes in the nation’s budget, all with little consideration for the contributions already made by land based operators, such as 30 percent corporation tax and a 25 percent obligation to local causes.

The Finance and Planning Committee had previously backed an amendment proposal brought forward by the treasury that sought to lower the revenue levy to around 15 percent but reneged on its word within the week once it was clear that the majority of MPs were not of the same thought.

“It looks like there are so many issues being raised on this matter, in order to allow more consultations I wish to withdraw,” said Joseph Limo, chair of the committee.

Since the higher tax rate came into effect on 1 January operation opposition has only grown in stature, with some abandoning the market altogether, citing untenable fiscal conditions. Besides dropping the revenue tax from 35 to 15 percent the amendment would double player winning take to 20 percent whilst further reducing operation obligations to social causes and charity from 25 to around 5 percent.

The latest decision appears to be at odds with the overall direction of the nation and the current drive to cement itself as an attractive, well-regulated destination.

The Kenyan tourism industry is not only one of the strongest on the continent but is one that is on the up. Strategies to boost the sector sector bore fruit in 2017 with the country recording a 20.3 percent growth with total earning hitting $1.2bn (Ksh120bn) despite a protracted national election campaign hitting visitor confidence.

However, disparity exists between the national branding as a nature-focused destination and the urban climes that so often offer the largest concentration of gaming venues. Part of this is slow rate of regulation and maturation within the nation’s gambling sectors, something that this latest decision does little to aid.

Local authorities can continue crackdowns on illicit gambling dens, but when legal practices are at such a disadvantage, both for operator gain and player win the black market for slots and online gaming is only going to grow. It will be of little consequence what the tax rate on casino games are if there are less and less people engaging with them.

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