A section of MPs led by National Assembly Majority Leader Aden Duale have criticised the move by SportPesa to cancel all local sports sponsorship over high taxation.
SportPesa, Kenya’s leading gaming platform has protested the 35 per cent taxation on all its revenues saying it is too high and a threat to survival of its activities in the country.
This was followed by its CEO, Ronald Karauri announcement on Tuesday that all local sports sponsorship has been terminated, a move that would see among others, local football clubs, Gor Mahia and AFC Leopards pull out of the continental championships.
Mr Aden Duale, Senators Irungu Kang'ata (Murang’a) and Aaron Cheruiyot (Kericho), and Kipkelion West MP Hillary Kosgey on Wednesday accused SportPesa of blackmailing the government to evade paying taxes from the billions they collect.
“Kenya is among the countries with the lowest gambling tax rates in the world,” Mr Duale said noting that Germany charges 90 per cent, France and Austria up to 80 per cent and Denmark 75 per cent among others.
Mr Kang'ata wondered how such a company can manage to sponsor a premier league team and then argue it has no money to sponsor local teams even as he accused it of “playing public relations masking schemes.”
“The new tax on gambling is not punitive as some people would want to think. It is within the range of other “sin taxes”- like cigarettes and alcohol taxes. In fact gambling is not an economic activity that adds value to society,” Mr Kang'ata said.
The Murang’a Senator even dared the company to cease its operations in the country “if it is convinced that” the taxation regime is punitive noting that what is given is mere tokenism as the amount devoted to sports charity is a fraction of the billions earned as profits.
“Sports gambling is even worse because it targets masses unlike other forms of gambling that target the rich like casinos. They can’t leave Kenya because they know too well that there is a milk cow around for no job done,” he said.
Mr Kosgey said the government should be firm if it wants Kenyans to get value for the money they invest in the gambling companies.
He said he will push for gambling taxa to be increased to 50 per cent in the next financial year.
“They get money from Kenyans and it is only fair that the profits they make go into serving Kenyans in economic development. We will not allow them to blackmail the government,” Mr Kosgey said.
Mr Cheruiyot, in a post on social media said SportPesa has run out of ideas.
“SportPesa can sulk all they want. In fact we should ban gambling companies and only allow the same to be run by those who retain all their proceeds within Kenya,” Mr Cheruiyot said.
Former Kakamega Senator Mr Boni Khalwale urged President Uhuru Kenyatta to resist the blackmail tactics saying that they must pay taxes.
“These fellows rake in, in excess of Sh15 billion per annum, without as little as selling any goods or services. Kenya cannot and must not be turned into one giant national casino to please some people, SportPesa included," Mr Khalwale said.