MPs to vote again on 50pc tax on betting companies

Finance minister Henry Rotich proposed in March to raise taxes for betting firms to 50 per cent of gross profits from 7.5 per cent. FILE PHOTO | NMG

What you need to know:

  • Finance minister Henry Rotich proposed in March to raise taxes for betting firms to 50 per cent of gross profits from 7.5 per cent.
  • Gaming firms have complained that punitive tax would deal them a fatal blow.

MPs will on Tuesday repeat a vote on whether betting firms and casinos will pay the higher tax of 50 per cent of gross profits from 7.5 per cent as a major split characterises the seven-fold rise.

National Assembly Leader of Majority Aden Duale invoked provisions of Standing Orders to return four sections of the Finance Bill, 2017 that proposed the high taxes to a second vote.

The first vote was carried out on Thursday where MPs backed Treasury proposals for the 50 per cent tax on turnover for gaming and lottery firms and rejected suggestions of lower levies proposed by the Finance Committee.

Members had spared betting companies such as SportPesa from the 50 per cent tax rate and kept the levy at the current rate of 7.5 per cent.

But dissenting MPs raised complaints on the Thursday vote, prompting Mr Duale to call a second vote on the four items in what is regarded as recommittal in parliamentary lingo. Finance minister Henry Rotich proposed in March to raise taxes for betting firms to 50 per cent of gross profits from 7.5 per cent.

He said money from the levies would fund sports, culture and the arts. This prompted an uproar from gaming firms who said the punitive tax would deal them a fatal blow.

The MPs on Thursday agreed with the report of the Finance, Planning and Trade committee that proposed the deletion of a clause in the Finance Bill raising taxes on betting revenues to 50 per cent.

They deleted clause 26 of the Finance Bill effectively retaining tax on betting revenues at the current rate of 7.5 per cent but Makadara MP Benson Mutura rose to inform the chairman of the committee of the Whole House that there was no quorum to approve any changes to the Bill.

When the bell was rung and quorum was attained, the MPs voted to retain Treasury secretary Henry Rotich’s proposal to impose uniform 50 per cent tax on gamming, lotteries and prize competition.

Those who opposed the reduction of the 50 per cent tax to the current rates through an acclamation vote unsuccessfully tried to force a division (physical vote) after failing to marshal 15 MPs required to call for such a vote.

This meant that a part from betting whose taxation was retained at 7.5 per cent of total revenues, gaming, lotteries and prize competition will be taxed at 50 per cent.

Mr Duale informed MPs that he will be initiating a second vote on clauses 26, 27, 28 and 29 of the Finance Bill that proposes to raise taxes for betting, gaming, lotteries and prize competition to a uniform 50 per cent of total revenue.