Today, the Pambazuka National Lottery (PNL) followed partner Sportpesa in suspending its operation in Kenya following a new 35% tax that came into force on January 1, 2018.
Kenya: Pambazuka lottery now suspend operations in the country due to tax levy pic.twitter.com/5rmxcN7NJ9
— Samira Sawlani (@samirasawlani) January 7, 2018
PNL, which is operated by Bradley Limited, interpretation of the tax change is that, whereas they had been paying out 55% out as prizes and 25% as a tax to charities, the new 35% tax makes operations impossible as their tax costs will be 115% before deducting any operating costs.
PNL was established in 2016, and the suspension announced on January 7 will allow any winners of prizes to claim them up to April 7, 2018. The Pambazuka statement reads that “operating any lottery under this framework is not possible and therefore business operations are forced to close” but, as with Sportpesa, who had become arguably the leading betting company in Kenya, but who cancelled all local sports sponsorships last week, there is no mention of what the numbers actually are i.e revenue and taxes (in dollars or shillings), to compare how they were faring before the tax, to how unsustainable business will be under the new tax.
EDIT PNL’s directors say they had invested over two billion shillings (~$19.5 million) and employed over 500 people.