Kenya's biggest football clubs Gor Mahia and AFC Leopards have opposed the reintroduction of 20 percent excise tax in the 2021/22 budget, saying it will negatively affect betting companies supporting local teams and lead to withdrawal of their sponsorship.
In his speech at Parliament buildings during the reading of the budget on Thursday, Treasury Cabinet Secretary Ukur Yattani reintroduced the tax which was scrapped by President Uhuru Kenyatta in July 2020.
"Excise duty on betting at 20% of the amount will be wagered," said Yattani meaning the amount would be levied and passed on to a person who has won on a bet.
In a strongly-worded joint statement, Gor Mahia chairman Ambrose Rachier and his AFC Leopards counterpart Dan Shikanda, said the return of the tax will further drive out current league sponsors BetKing among other betting firms which have consistently supported the game.
They argued that excise tax is one of the reasons why SportPesa left the Kenyan market in 2018, saying betting firms have cumulatively supported football to a tune of Sh1.6 billion from 2016 to 2020 and shouldn't be punished through punitive taxes.
The duo said the betting firms have continued to support both top tier league and the National Super League even amidst coronavirus pandemic which has denied the two clubs with a massive fan base, revenue as matches are played behind closed doors and in strict adherence to Covid-19 protocols.
"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," continued the statement.
Rachier and Shikanda have now called on the government to scrap the tax to help rescue the game which is facing unprecedented times due to the measures but in place to curb the spread of the pandemic.
"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," it added.