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SportPesa, Kenyan gaming firm is closing down its operations following the 35 percent turnover tax if the law prescribing the same remains in force for the sports betting industry. The company is planning to move its base to Tanzania or the United Kingdom which would end up in loss of jobs.
Gerasim Nikolov, Global CEO, SportPesa feels the company would suffer on accounts of profits under the new taxation policy. Nikolov further said:“There is nowhere in the world where such a massive tax is levied on turnovers and even here in Kenya, no firm can survive today if a 35 per cent tax was put on its turnover.”
The Finance Bill 2017 introduced by President Uhuru Kenyatta imposes a regular tax of 35% on all gambling revenue- betting, gaming, lotteries and prize competitions. Before this law, a 7.5% betting tax was levied.
The SportPesa founder decided to withdraw sponsorship to local sports clubs from January last month citing the new tax burden.
The aim of the government was to target higher tax revenue from the booming gaming industry and to regulate and introduce stricter laws for minors involving in gambling.