The impending withdrawal of SportPesa from Kenyan football will have grave effects on local sport, Football Kenya Federation President Nick Mwendwa has warned.
President Uhuru Kenyatta last Thursday signed Finance Bill 2017 after National Assembly accepted his proposal for 35% tax on revenue from betting firms, something that did not go down well with the industry players.
Online gaming company, SportPesa, which controls majority share of the Kenyan betting market, announced on Friday that they will, as a result, withdraw all sponsorships for clubs and federations starting January 1, 2018, following the enactment of the law, a move that has forced FKF boss to jump into the tax war debate by appealing to the government to further review new rates downwards to save Kenyan football.
"We have about four betting companies involved in the game and obviously football is the biggest hit. We are going to feel it the most. The government insists that they need to increase taxes in conformity with other countries but we feel that there should be further negotiations to get a solution because we don't feel that the government can sponsor clubs," Mwendwa told Goal.
"While it is true that the government can sponsor the league and the national team, it is not realistic of them to sponsor clubs which stands at 6000 in the country hence the need to have other sponsors like betting companies on board. These betting companies need to pay taxes but it should be reasonable tax.
Mwendwa added, "In four days, we are meeting Sports Cabinet Secretary (Hassan Wario) to try and seek audience with the President (Uhuru) to continue lobbying and discuss with them on a reasonable percentage acceptable by all."
Mwendwa however, could not disclose what is 'reasonable percentage'. Initially, parliament had proposed 50 percent tax on procceeds from betting and gaming before it was reviewed down to 35 percent following the President's recommendation. Currently, taxes on betting attracts a seven percent deduction.