Sportpesa takes another shot at tax appeal as it pulls plug on sponsorships
6 months ago, 3 Jan 16:30
Sportpesa hangs on its last shred of hope as it prepares to appeal a High Court ruling that dismissed their bid to overturn the law raising tax on gambling. CEO Ronald Karauri said SportPesa has had to take cautionary measures to reduce operational costs. The firm has since withdrawn full value of all its local sponsorships. “We went to court and unfortunately lost. Even though we are going to appeal, we cannot just wish that we will win. We have to take action now to ensure that we do not go into losses.” It is expected to go back to court this week. “We already lodged our appeal when the ruling was read and hope to file our papers this week.” Last week Sportpesa alongside Pambazuka National Lottery lost a case challenging the implementation of a 35 per cent tax on revenue at the High Court. Karauri said that sponsorships were a big expense and with the new tax regime, the firm’s business in the country would only be economically viable if they let go the said sponsorships. “SportPesa is not exiting the country but to survive that’s why we have to do drastic cuts on our expenses,” he said. Given that the firm paid approximately Sh1.7 billion tax in 2015 when betting, gaming and lottery firms all paid a uniform tax of 15 per cent, Karauri said the taxation burden will shoot up by a significant margin. He said the imposed tax burden was unfair granted it did not trickle down to the consumer as winnings were to go untaxed as usual. “When we ask about fairness whenever there is tax on let’s say alcohol, the tax is for the consumer whereas in this case the tax burden is only on us,” he said.
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