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Ruto bombshell to SportPesa: Paying tax is not negotiable!

After more than six months of lobbying and threats, the Kenyan government has finally answered Sport Pesa – the biggest betting firm in the country.

Deputy President William Ruto chose a sporting awards event – the Sports Personality of the Year Awards (SOYA) — to tell Sport Pesa that the government will not change its mind on the new taxes it has slapped the betting industry.

Ruto said paying taxes was a must and non-negotiable. Sport Pesa has been pushing for a meeting with the President to negotiate for a reduction of the taxes described as too punitive to be borne by any industry.  The new taxes will see the betting firm pay 35 percent taxes on its revenues. As if that is not enough, after all its costs are deducted and it remains with profits, the tax man will come back again and take away another 30 percent of what is left.

Sport Pesa reacted to the new taxes by withdrawing sponsorships estimated at Sh600 million. Now eyes remain on the firm to see its next course of action.

It had initially threatened to exit the Kenyan market but then rescinded the decision. It appears it will just have to find a way of surviving within the current tax regime and do with lesser profits.

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