Football in Kenya faces new problems as the government prepares to reintroduce a once-repealed 20 percent excise tax on sports betting.
Reintroduction of the gambling tax in Kenya
Kenyan football clubs are again in a pickle after the cabinet secretary of the National Treasury and Planning Ukur Yatani said a previously repealed 20% tax on sports betting companies will return, Tuko reported.
The news was delivered late last week during the 2021/2021 budget reading which announced the reintroduction of the controversial tax. The 20 percent sports betting tax has long been the cause of much resentment in Kenya and in the past led to the withdrawal of numerous sports betting providers and thus to the urgently needed financing of sport in the country.
Yatani justified the need for a higher sports betting tax by arguing that additional budgetary resources were required and the negative social effects normally attributed to gambling in general. The announcement sparked a strong reaction from football clubs in the country protesting the excise taxes.
AFC leopards published a statement on excise duty and raised a number of problems it would lead to. In essence, a hike in the tax would not allow many clubs to continue operations and thus cut funding due to existing links with betting companies that may not be inclined to continue operating in the country.
Football rallies against the measure as harmful
The club then enumerated the distinct advantages of maintaining such sponsorships and sticking to the existing rate that allows Kenyan football to evolve. AFC Leopards found that many football clubs around the world use a similar sponsorship model, and they use it the same way to fund their activities
The Leopards also noted that Kenyan football is expected to return for the next season, but the new excise tax could now slow this down or even destroy professional football in the country entirely. The club was supported by Gor. A joint statement by the teams reads as follows:
“As we await the announcement of the 2021/2022 budget highlights by the National Assembly, we would like to make the public aware of them; Members of Parliament and the government will understand the potential negative impact that the sports sector, and particularly the football sector, in Kenya, if the 20% excise duty is introduced. “
The clubs argued that the tax had come at an inopportune time and appealed to the government not to burden the clubs any further during these difficult times and to give “the Sports Brotherhood a chance to fight”.
Slowdown in the country’s sporting development
The excise duty of 20% has long been the cause of everything that has slowed Kenya’s sporting development. Sportpesa, one of the country’s top sports betting providers, was evicted after the government tried to collect the excise duty contested by Sportpesa.
When leaving the country, Sportpesa had to give up its sponsorship deals with Gor Mahia and AFC Leopards. Then a legal battle erupted, which resulted in Sportpesa overturning government attempts to impose excise taxes on them and restore operations.
Should the excise tax scenario prevail again, Kenya would likely lose a lot of income from funding sports clubs. Even companies like Betsafe can appeal the decision and withdraw support or even out of the country. Many have done so in the past, and the government should probably learn from their past mistakes.