The Kenya Rugby union has called on the government to review 50% tax on betting, lottery & gaming firms.
In a press release sent to news rooms through the Chief Executive Officer Ronald Bukusu the Union says the tax will hamper the growth of the game.
The proposal, contained in the Finance Bill 2017 and announced by Treasury Cabinet Secretary Henry Rotich in his recent Budget Statement, seeks to increase the current tax rate payable under the Betting, Lotteries, and Gambling Act to 50 per cent.
If implemented, the industry will be taxed half of its gross earnings before expenses, including marketing costs, and thereafter subjected to a further 30 per cent tax on net profit after deduction of all other expenses.
Below is the press release by the union from the C.E.O Charles Bukusu
The newly created National Sports , Culture and Arts Fund is intended to support development of Sports , Culture and arts.
Monies are collected from taxed proceeds of betting firms and thereafter pooled into the proposed fund for distribution to various sports, culture and art related activities and organizations.
The country has witnessed inefficiencies in sports activities attributed to poor planning and misappropriation of sports funds. With this in mind, there is hardly anything to look forward to with the establishment of this fund, especially when little, if no regard has been given to the detailed funding requirements of each sports federation. Further, , the needs of sports federations differ greatly from those of arts and cultural bodies, something that the fund fails to take note of. For example, United Kingdom came to a conclusion that that imposing gambling tax was a misguided move and abolished it 16 years ago. The then Chancellor Gordon Brown announced that bookmakers would be taxed on their gross profits at a rate of 15%. He also scrapped the system in which the Government collected betting duty of 6.75% from bookmakers, which was passed on to punters in a 9% tax, meaning bookmakers absorbed all the costs of the new tax themselves.This is food for thought for our authorities
Imposition of the 50% taxation on betting firms directly impacts on their beneficiaries, a case in point, the Kenya Rugby Union who will be hit by scaled back funding from our title sponsor.
Ronald Bukusi, C.E.O for Kenya Rugby Union(KRU), said that scaling back of funding from betting companies, as intended in the proposed National Sports, Culture and Arts fund will be defeatist, and retrogressive to the growth of the game, and sport in general. He added that sports federations are constantly being requested to be self-sustaining, to be attractive to sponsors, and that is what the Kenya Rugby Union has been achieving by getting support from sponsors.
The organization recently entered a five year partnership with SportPesa worth Ksh 600m, a venture geared towards growing the game at all levels, across all genders in the country. It is a venture that has been beneficial to the organization in terms of improved perks and performances by our national squads as well as timely access to funds and resources for developmental programs. As a result, KRU is able to develop and implement programs over the short and long terms while remaining accountable to all its stakeholders.
“Rugby is the fastest growing team sport in the country, a feat that could not have been achieved without the implementation of these programs. We have witnessed players and teams from areas and schools previously viewed as non-traditional rugby playing zones taking up the sport, and even breaking into the national squads and winning national titles,” said Mr. Richard Omwela, KRU Chairman
“The Kenya Rugby Union in particular, is keen on further growing and developing the game within all corners of the country, and amongst all willing participants. These development programs require heavy funding from the organization as well as its various benefactors,” added the KRU Chairman
With increased uptake of the game, there has inevitably been an increase in various opportunities within the sport. There is suddenly a demand for coaches, physiotherapists, conditioning coaches, analysts, kit suppliers, food vendors, event managers and kit suppliers. Employment opportunities have been created directly and indirectly.
“The organization has not only been able to run various programs, but also host successful events, generate other revenue streams , pay staff salaries while creating employment opportunities directly and indirectly. Maureen, who initially started out cleaning the offices at the KRU Secretariat now also cleans kit for several other teams and has been able to employ six people to aid in her operations, do we want to throw this all away? The National Sports, Culture and Arts fund in its current form will hurt the growth and development of Kenyan sports. ,” Mr. Bukusi concluded.