Kenyan government goes after gamblers with 20 per cent winning tax

david nganga

April 20, 2018 10:48 AM

Betting and gaming companies will withhold a fifth of the sums won by gamblers to be remitted to the taxman.

The National Treasury could soon impose a 20 per cent tax on gambling winnings following plans to revive a controversial bill that was dropped in 2016 due to numerous hiccups in its implementation.

Kenya’s government on Wednesday tabled a draft of The Tax Laws (Amendment) Bill 2018 in Parliament which, if passed, will see betting and gaming companies withhold a fifth of the sums won by punters to be remitted to the taxman.

“The Bill seeks to amend the Income Tax Act to introduce a tax on winnings,” says the proposed law.

The draft Bill follows the imposition of the new uniform 35% tax on gambling operators’ revenue in January.

The gambling companies vigorously protested this change, saying it made their business untenable and would force them to pass on the costs to their customers.

Sponsorship

The Pambazuka National Lottery, which had been paying only 5% tax on its revenue, suspended its Kenyan operations. Likewise, SportPesa cancelled its Sh600 million sports sponsorship deal with local football, rugby and boxing clubs.

The Treasury however said the steep taxes are meant to discourage gambling particularly among the youth.

Before the 35 per cent tax, lottery firms were taxed at five per cent of sales, betting firms at 7.5 per cent, casinos at 12 per cent and competitions such as raffles at 15 per cent besides other taxes and levies.

Experts reckon that the re-introduction of tax on winnings is now expected to remove some shine off gambling.

david nganga