Kenya’s biggest football clubs AFC Leopards and Gor Mahia have released a strongly worded joint statement opposing the reintroduction of a 20% excise tax in the 2021/22 budget.
In a bid to raise cash for the financial year amid the struggles caused by the Covid-19 pandemic, Treasury Cabinet Secretary Ukur Yattani has reintroduced the tax, which was removed by President Uhuru Kenyatta in July last year.
“Excise duty on betting at 20% of the amount will be wagered,” said Yattani, which would mean that the amount would be levied and passed on to a person who has won on a bet, which according to Yattani would also help discourage betting in the country.
But AFC Leopards chairman Dan Shikanda and Gor Mahia chairman Ambrose Rachier argue that the tax will negatively affect betting companies supporting local teams and lead to the withdrawal of their much-needed sponsorship.
Both Shikanda and Rachier explained that betting firms have consistently supported football in the country, cumulatively delivering Sh1.6bn (US$14.8m) from 2016 to 2020, and therefore should not be punished through stricter tax measures.
In the statement, Shikanda and Rachier said the return of the tax would cause current league sponsors BetKing to withdraw their sponsorship, explaining that the excise tax was one of the reasons why SportPesa left the Kenyan market in 2018.
“The enactment of the 20% excise tax will unequivocally rule out continued sponsorship of football clubs across all tiers (National Super League, Division 1 and County Leagues), with the net effect of rendering the operations of most of the league teams unsustainable,” the joint statement read.
“The tax proposal is ill-timed and makes a strong appeal to the government and members of parliament to make special considerations on this exigent matter and give the sports fraternity a fighting chance during these difficult times.”