Kenyan online sport betting operator SportPesa has pulled US$5.8m of annual sponsorship from domestic markets following a government tax hike.
The Kenyan government’s implementation of a more than four-fold increase in taxation, which has risen to 35 per cent, left SportPesa CEO Ronald Karauri claiming he had little choice but to cut costs.
“We will pay the tax, it's the law,” said Karauri through his Twitter account. “We just cannot pay the tax and do our sponsorships at the same time.”
The tax rate rise relates to gross profits made by firms operating in the sports betting, casino and lotteries sectors, with the government intending to use the revenue to set up a new fund for sport and culture.
Last week, SportPesa – whose sponsorships deals in Kenya included the Football Kenya Federation, football champions Gor Mahia and the Kenya Rugby Union – were unsuccessful in challenging the tax hike at the High Court.
The Kenya Rugby Union said in a statement: “The cancellation of this contract forces us to completely re-examine our structures and we immediately call upon the government to step into the breach and provide the necessary support.”
