Sports and gaming company SportPesa has announced that it will shut down operations in Kenya if the law on 35 per cent tax increase on betting signed by President Uhuru Kenyatta is implemented.
SportPesa Global Chief Executive Officer (CEO) Gerasim Nikolov said the company could not operate profitably in the country under the current tax regime.
“There is nowhere in the world where such a huge 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,” Nikolov stated.
He added: "Unfortunately, the ultimate effect of us shifting operations from here will be wide considering the various businesses that depend on this industry.”
Reports indicate that the company could be considering shifting its operations to Tanzania or the United Kingdom (UK).
Earlier on, SportPesa announced that it would withdraw all sponsorship meant for clubs and federations starting January 1, 2018.
The company's CEO Ronald Karauri asked all stakeholders to plan accordingly as the drastic step needed to be taken due to the recent increase in tax on betting.
Last month President Kenyatta signed into law a bill to impose a tax of 35 per cent of gross profits on all forms of gambling.
Treasury Cabinet Secretary Henry Rotich had originally proposed raising the percentage to 50, arguing that the rapid growth of on-line gambling was hurting the youth.
