Sports Principal Secretary Kirimi Kaberia has said that the recent withdrawal of sponsorship by corporates will not affect sporting activities in the country as the government has been the largest financier of sports federations.
Kaberia assured sports federations that the national sports, culture and arts fund is equipped to address their financial needs.
Soon the board will take over activities that were being supported by corporates,” said Kaberia.
“The fund’s board will be meeting federations next week to work on a system of prioritized funding to address the new challenge,” he said.
SPORTPESA WITHDRAWS SPORTS SPONSORSHIP OVER TAX
Kenya’s largest betting firm Sportpesa made good their threat to withdraw its commitment to all local sponsorships last week due to what it says is an unsustainable tax burden brought about by the new tax laws, where the government has imposed a 35 percent gaming tax on gross earnings for all betting firms in Kenya.
“To end all speculation, we have effectively cancelled all sponsorships with Football Kenya Federation, (Harambee Stars coach) Paul Put, (assistant coach) Andreas Spiers, Kenya Premier League, Kenya Rugby Union, Gor Mahia, AFC Leopards, Nakuru All-Stars, Boxing Federation and the Super 8 grassroots tournament,” said SportPesa chief executive officer Ronald Karauri .
Sportpesa lost a case where the betting firm had moved to court to challenge the implementation of the new tax law after high court judge justice John Mativo upheld the new tax laws.
THE BETTING, LOTTERIES AND GAMBLING ACT
The Finance Bill (2017), which was signed into law by President Uhuru Kenyatta in June 2017, amended The Betting, Lotteries and Gambling Act to increase the tax rates to 35 per cent., effective from January 1, 2018.
Treasury has initially proposed a 50 percent tax on betting firms, which was shot down by the National Assembly, arguing that the rate was punitive and likely to kill the sector
SportPesa sponsorship in local sports is worth approximately Sh600-750 million per year.
SportPesa made history last year after the company became the first Kenyan company to sponsor English Premier League clubs such as Hull City, Southampton and recently Everton FC.