Gor regret impending sponsorship fallout as tax law bites

Gor Mahia FC Chairman Ambrose Rachier confirmed Saturday that their sponsor who are also the main partners for the Kenyan Premier League (KPL) provided an official notification they are set to severe ties with the club, something he said has been received with ‘utmost regret’.

The gaming company is poised to withdrawing funding for clubs – including AFC Leopards and Nakuru AllStars – as well as unions/federations beginning January 1 in response to the passing of new tax laws on gambling revenues.

The three clubs and federations had been served notices of the impending pull out after the Government passed the legislation that will see a 35% tax rate on their gross revenue. The betting firm had warned its implemenation will impact greatly on their business.

“It is with utmost regret that one day to the New Year, the sports fraternity has been plunged into chaos as its key investors – gaming companies – face a bleak future in a new era of excessively high tax.

“While we are appreciative of the fact that the government wants to set up a sports fund with the increased revenue from these companies, we are wary of implementation and modalities of this fund.

“It is for this reason that we would like to implore the government to rethink this move which will be more harmful than helpful. Gor Mahia has been through thick and thin over the years. Before sponsors came into the picture, we struggled. This is an open secret. We went from selling bread to raise funds for the club to remain operational and pay players’ salaries, to setting up mobile PayBill numbers,” Rachier said in a statement posted on the club’s website.

In the immediate aftermath of the punitive tax law, Football Kenya Federation (FKF) and Kenya Rugby Union (KRU) – who receive handsome sponsorship packages from the multinational company – had led other concerned sports organisations in petitions against it but ended up being unsuccessful.

Gor are set to return to continental football in February by virtue of having won this year’s KPL title but Rachier has hinted the record champions might yet fail to honour some of their away matches that begin with a trip to Equatorial Guinea due to financial constraints.

“We are few weeks away from kick off of our continental matches in the 2018 CAF Champions League which starts in February. Traversing the continent to honour our fixtures is an expensive affair which Gor Mahia cannot afford on its own. These matches are a source of pride for the nation as participation in the tournament raises Kenya’s profile as a sporting nation.

I can go on and on about how guaranteed and steady support by corporates to the sports sector is important. The sports industry is a latent giant, let us not waste this opportunity to develop it by repelling investors from the industry. I therefore plead with the government to rethink this move which will sound a death knell to this very promising industry,” Rachier said.

The company, which also has operations in Tanzania, South Africa, the Isle of Man and the United Kingdom, opted to pay some percentage of Harambee Stars head coach Paul Put’s salary and it remains to be seen whether they will stay committed to it.

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Gor Mahia FC AFC Leopards Ambrose Rachier FKF KPL tax law Sponsorship

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