New Bill Adds Two Additional Gambling Levies for Betting Companies

The State is preparing two new taxes for betting companies, intensifying its assault on the multi-billion shilling business whose expansion seems to defy high taxes.

A gambling tax has been proposed by the Betting Control and Licensing Board (BCLB), and it will be levied at a rate of 15% of a betting firm’s gross gaming revenue plus an additional 1% monthly surcharge on the same revenue.

Currently, betting companies pay a 15% tax on their gross gaming revenue, which is turnover less winnings paid out. Additionally, they pay a 30 percent corporate tax on profits.

In the entire year ending in June 2023, Kenyans placed an all-time high Sh88.5 billion in online wagers, giving the Kenya Revenue Authority (KRA) Sh6.64 billion in excise taxes, up from the Sh5.1 billion raised the previous year.

The increased levies included in the Gambling Control Bill, 2023, according to the betting regulator, would be used to establish rehabilitation facilities and raise awareness of the harmful repercussions of the gambling craze, which has subsequently come to be a source of income for unemployed Kenyans.

In the current fiscal year, which ends in June of next year, 10 new players have entered the gambling business as a result of the increased popularity of gambling among Kenyans, particularly among young people without jobs.

“There shall be a tax to be known as gambling tax chargeable at the rate of fifteen per cent of the gross gambling revenue,” BCLB says in the draft Bill set to be opened for public scrutiny before it can be tabled in Parliament.

The basic income tax rate for betting companies is still 16 percent. The taxes are in addition to the yearly license and compliance costs that the businesses must pay to receive BCLB approval.

In addition to the 12.5 percent tax on each wager, the KRA mandates that the companies withhold 20 percent of the earnings paid to gamblers.

According to BCLB, the businesses must transfer the funds from the two taxes by the twentieth day of the next month, at the latest.