Parliament has bowed to pressure from the gambling sector to cut the 35 per cent tax on betting and gaming services to 15 per cent.

A report on the consideration of the Finance Bill, 2018 shows that the decision was made to preserve the economic and social contributions of the sector to the people.

“Section 29A of the Betting, Lotteries and Gaming Act is ammended in subsection 1 by deleting the expression thirty five and substituting therefor the expression fifteen” committee on Finance and National planning said in the report

The 35 per cent tax has been in operation since January 1, after President Uhuru signed it into law in June 2017.

Uhuru approved the law after declining to assent to a proposal by the law makers to retain taxation at 15 per cent in the Finance Bill 2017.

According to the Association of Gaming Operators of Kenya the 15 per cent tax if effected will ensure that the Kenyan gaming industry survives.

The operators argued that betting firms enjoy a gross margin of 7 per cent and a further 35 per cent tax will reduce the gross profit to 4.5 per cent.

Over and above the betting tax, the firms also pay a corporation tax of 30 per cent and dedicate 25 per cent of their sales to social causes like sports sponsorship as a legal requirement.

The new proposals by the Mps has also cut the share of sales meant for social causes and charity from 25 per cent of sales to at least five per cent.

The operators have been pushing for the return of the previous tax limits of between five and 15 per cent across the gaming sectors, or a reasonable tax bracket, but not 35 per cent across all sectors.

Before the introduction of the new tax limit, lottery was taxed five per cent, sports betting paid 7.5 per cent, casinos paid 12 per cent while price competition was taxed at 15 per cent.

While calling for a reduction of the tax, the Boxing Association of Kenya noted that betting companies reduce their support to sporting activities when taxes are raised.

After the 35 per cent tax became effective in January, Betting firm SportPesa canceled all local sports sponsorship.