Kenyan President Uhuru Kenyatta has sent back a Finance Bill to Parliament and recommended a levy of 35 per cent for the gambling industry.

Parliament had imposed a 39.5 per cent tax on betting, lotteries and gaming activities.

The president rejected the Bill because the House had deleted a clause that was designed to discourage the youth from engaging in betting.

The purpose of Amendment of Section 59 B of Cap 469 was to "discourage Kenyans, and especially the youth, in directing their focus on betting, lottery and gaming activities instead of productive economic engagement, a vice that is likely to degenerate into a social disaster.”

“This totally negates the spirit underlying the proposal to have the betting tax raised,” said the President in his proposal to the Speaker of the National Assembly signed on Tuesday.

The proposal to lower the tax charged to 35 per cent could cost the government about Ksh9 billion ($90 million) of revenues in the 2017/18 financial year. Tax from gambling activities could drop from about Ksh30 billion ($300 million) to Ksh21 billion ($210 million).

National Treasury Cabinet Secretary Henry Rotich had sought a parliamentary approval to increase cumulative taxes on the gambling industry from 39.5 per cent to 50 per cent of the annual turnover in a bid to shore up government revenues and limit the negative social effects of gambling on the youth and vulnerable members of the society.

However, the proposal which was contained in the Finance Bill, 2017, was dropped in Parliament last week on grounds that it would kill the gambling business.