The Kenyan Government’s decision to enact tough laws against the betting industry remains questionable to date.

The Government through Interior Cabinet Secretary, Fred Matiangi, argues that the new laws on gambling were implemented to save the youth from gambling addiction while others suggest that the self-interested government officials wanted to get a slice of the profit generated from the lucrative gambling industry.

Whatever the reasons that may arise; the financial consequences of the government’s blunt action cannot be disputed.

According to available data, revenue collected by the government from the gaming industry has fallen by 260 %.

The data shows that In June 2019, the government generated Ksh 354, 212, 882.00  from the gaming industry but after introducing the tough laws on the industry and over-taxing the players in the sector, a total of Ksh 74, 205,002.00 was collected in the month of September 2019.

When the gaming sector was at its peak, it was generating over $100m a year for the treasury.

The consequences of the drop in revenue that the government collected from the gaming industry will be left across various sectors, including health and education.

Earlier this year when the government took action against the betting industry and started withdrawing licenses of various betting companies , there was widespread concern from the private sector not only in East Africa- but across the globe.

Well-meaning apprehensions from Kenyans about ensuring the industry was properly regulated, which industry leaders fully supported, were exploited to justify an unprecedented level of government interference.

The 20% withholding tax placed on the betting industry that directly affected the gamblers by taking away a portion of their stakes and winnings  and other stringent tax liabilities were designed to destroy the industry that had created thousands of jobs and provided sponsorship of various sporting events around the country, in addition to the tax revenue it brought.

The Kenyan economy has begun to crumble after the government’s blunt action on the gaming sector.

Rather than improving the economy, the attack on the betting industry has led to a significant and serious decrease in funds available for public spending.

The much needed tax income for public services has dried up and ironically, gambling has continued, only it is now taking place in an unregulated and uncontrolled way, leaving Kenyans vulnerable to the dark forces operating in the shadows.

Yet, tax collection isn’t the only repercussion of enacting ill-informed legalisation; thousands of Kenyans have lost their jobs, leading to widespread protests both online and on the streets.

 Since July, at-least 2000 Kenyans have lost their jobs and this number shows no signs of slowing.

Infact, more companies are issuing profit warning and closing down, citing harsh business environment.

The deceitful manner in which the Kenyan government has handled the betting industry serves as a stark reminder of the socially catastrophic impact of ill-thought government policy, considering the unemployment rate stands at 9.3%.
And it’s not the betting industry that has been affected alone.
By allowing certain government officials with self-interests to attack the gaming sector for personal gain, the President has declared open war  on all tax-paying sectors in Kenya.
Kenya’s largest flower company, Finlays, announced it would close two farms, much to the despair of 2000 Kenyans who worked in the farms to provide for their families and industry players, who say the effects will be devastating to the local economy.
The reason of Finlays troubles? The KRA owes the company Ksh800 million in VAT reimbursements and to add salt to the injury,  it has imposed a 2.5 percent Free On Board levy on growers from which it makes approximately Ksh650 million every year. This means flower growers now pay up to 42 levies – business has become untenable.
The flower industry which generated Sh 113 billion and employed more than 500,000 Kenyans is headed for trouble just like the betting industry.
This begs the question, who’s next?
If the rumours are to be believed, President Kenyatta is furious with Interior Cabinet Secretary Fred Matiangi following his punitive laws on the gaming sector.
Uhuru is reportedly not happy with the way Matiangi handled the issue and his involvement in a rival betting company that has been allowed to continue while locking others out.
As a direct result of Matiangi’s decision-making and chest thumping, the President has now overseen one of the most significant hits to international investor confidence and a sharp rise in unemployment.
There is also massive civil unrest, all because of one ill-advised ministerial appointment.
The world is watching and waiting for the President’s  next move, will he stop the turmoil and salvage Kenya’s once-promising economy or continue to let rogue ministers destroy a once-friendly investor environment?


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