The National Assembly Departmental Committee on Finance and National Planning have agreed to remove the excise duty on betting.
The move, if effected, could see several betting sites that suspended their operations in Kenya return to operations.
The Kenya Revenue Authority (KRA) had ordered gaming companies to start submitting the revenue collected from the 20 percent excise tax deducted from stakes placed by punters.
Last year, the then biggest betting company in Kenya,Sportpesa sacked all its 400 employees in the aftermath of its lost battle with the government over renewal of its license.
In a statement, the firm said that it was leaving over hostile business environment imposed by the Kenyan government.
“Sportpesa is disappointed with the decision by the Kenyan legislature to impose a 20% excise tax on all betting stakes. The tax is based on a fundamental misunderstanding by the Rotich led treasury of how revenue generation works in the bookmaker industry,” read the statement in part.
“Until such time that adequate taxation and non-hostile regulatory environment is returned, the SportPesa brand will halt operations in Kenya.”
The firm said compounded by the currently in-effect 20 per cent Withholding Tax on Winnings, the economic incentive to place bets will be completely removed as the taxes will deprive consumers of their total winnings.
“This will have severe consequences for licensed betting companies, which dutifully pay their taxes and ultimately will lead to a decline in government tax revenue to near zero and will halt all investments in sports in Kenya,” the firm said.
Also, last year, the then second largest sports betting firm, Betin, declared all its staff redundant and exited the Kenyan market.
The two firms accounted for a lot of revenue in the media industry, with SportPesa sponsoring the Kenya Premier League and two teams, Gor Mahia and AFC Leopards.
The two teams have since been struggling to pay its players and stay afloat since the firm left the scene.