Why Finance Bill is bad for our sports
Kenyan President William Ruto (second right) congratulates Kenya's Ferdinand Omanyala (centre) after winning the 100m men's event as Kenya opposition leader Raila Odinga (second left), Kenyan Prime Cabinet Secretary Musalia Mudavadi (left) and Kenyan Sports Cabinet Secretary Ababu Namwamba look on during the fourth edition of the Kip Keino Classic Continental Tour at the Kasarani Stadium in Nairobi, on May 13, 2023.
What you need to know:
- These two industries have largely contributed to professionalisation of Kenyan sport and increasing their taxes will only serve to push them away from sports sponsorships.
- In the end, it’s sportspersons that will suffer and the gains that have been made in the past decade will slowly be eroded.
Social media has been awash with complaints over the Finance Bill that the Kenya Kwanza government is hell-bent on passing into law to allow the government run its activities smoothly.
President William Ruto and his Deputy Rigathi Gachagua have consistently drummed up support for the Finance Bill to an extent of suggesting that it’s as good as passed given Kenya Kwanza’s numbers in Parliament.
Contentious issues in the Finance Bill are the three per cent housing levy, increased Value Added Tax, higher taxation on industries such as insurance and betting among others.
While increasing the government’s tax base would help Kenya get out of the current financial crisis, it’s important that Ruto and his government go slow on some industries which have consistently funded Kenyan sports teams and competitions even when the government has turned a blind eye.
For the longest time, sports in Kenya has always taken a back seat whenever matters of national importance are discussed.
It’s only when one of our athletes post impressive results, like Faith Kipyegon did last weekend by breaking the world 1,500 metres record, that politicians take note and go on a tweeting spree to post congratulatory messages.
It’s not lost on anyone that betting and insurance firms have consistently invested a fortune in Kenyan sports teams and local competitions over the past one decade.
Memories of SportPesa bringing Theo Walcott and Everton to Moi International Sports Centre, Kasarani are still fresh in the minds of Kenyans.
The Kenyan Premier League was also one of the best leagues in Africa due to SportPesa’s investment as title sponsors that saw local giants Gor Mahia and AFC Leopards attract some of the best talents in Africa.
During that time, other KPL clubs such as Mathare United, Kariobangi Sharks and Sofapaka also benefited from sponsorship from companies such as Britam Insurance, Betika and Betway.
The existing withholding tax on premiums paid by the insured as well as the proposed VAT on claim payments will not only hurt the reputation of insurance companies but will further reduce penetration of insurance in Kenya which is already at a lowly three per cent.
Similarly, the proposal to increase tax on stakes and winnings does not make business sense to betting firms.
These two industries have largely contributed to professionalisation of Kenyan sport and increasing their taxes will only serve to push them away from sports sponsorships.
In the end, it’s sportspersons that will suffer and the gains that have been made in the past decade will slowly be eroded.
