Government Gave Sportpesa A Bill That They Refused To Take

After a prolonged tax stand-off with the government Sportpesa finally called it quits and halted operations in the country. The company was among a list of 27 firms that saw their licenses revoked over alleged tax fraud. The company which on Wednesday fired atleast 400 employees was offered a deal by the government to have their licenses restored but declined.

In a statement released by the betting firm, the decision to halt all business in the country came after it declined to accept a bill that would see the Kenyan legislature impose a 20 percent excise tax on all betting stakes.

“The tax is based on a fundamental misunderstanding by the Rotich-led treasury of how revenue generation works in the bookmaker industry. This decision will have a damaging impact on both customers and treasury,” the statement read. With the government already passing a law that is currently in-effect 20 percent withholding tax on winnings, the economic incentive to place bets would be completely removed as the taxes would deprive consumers of their total winnings.

Ronald Karuri, the firm CEO announced the company won’t resume its services until the government scraps the 20% exercise tax imposed on all stakes.

The firm argues that this will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya.