President Uhuru Kenyatta says betting and lottery firms must pay 35 per cent of their revenues to the taxman.
Mr Kenyatta said he made the recommendation in a memorandum to the Speaker of the National Assembly after rejecting the Finance Bill.
After successfully lobbying MPs to reject the 50 per cent proposed by Treasury via the Finance Bill, the companies now have to contend with the increase set by the President.
President Uhuru Kenyatta has rejected the lower tax MPs handed betting and lottery firms, saying they must pay 35 per cent of their revenues to the taxman.
Mr Kenyatta said he made the recommendation in a memorandum to the Speaker of the National Assembly after rejecting the Finance Bill.
After successfully lobbying MPs to reject the 50 per cent proposed by Treasury via the Finance Bill, the companies now have to contend with the increase set by the President.
Rejection of the Treasury’s proposals by MPs meant the betting companies were to continue paying the older tax at the rate of 7.5 per cent, casinos and other gaming companies 12 per cent, lotteries at five per cent and prize competition at 15 per cent.
The President said he has rejected the Bill because Parliament deleted the clause that was designed to discourage the youth from engaging in betting.
“The proposal, which read, “29. Section 59B of the Betting, Lotteries and Gaming Act is amended in subsection (1) by deleting the word “fifteen” and substituting therefore the word “fifty” was however dropped when Parliament passed the Bill,” said Mr Kenyatta.
“This totally negates the spirit underlying the proposal to have the betting tax raised as pointed above.” He has recommended that Clause 29 of the Bill be reinstated with amendment to read: “Section 59B of the Betting, Lotteries and Gaming Act is amended in subsection (1) by deleting the word “fifteen” and substituting therefor the words “thirty-five.”
Bill has to garner at least two-thirds of MPs – 233 of them – to throw out the memorandum.
President Kenyatta’s memorandum was not read to MPs on Tuesday. MPs will have barely two days to decide on it because their term comes to a close on Thursday, but they can be summoned for emergency sittings before the August 8 poll.
The tax hike proposed by the Treasury prompted an uproar from the gaming firms who warned that the seven-fold tax hike will suffocate the fledgling industry and hurt support for businesses including telecoms and media companies.
Betting has witnessed quick growth since 2014 thanks to mobile phone-based financial services like M-Pesa, which allows users to deposit bets and receive winnings on their phone without needing a bank account.
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