Kenyan government relents on betting tax

Betting firms in Kenya received the welcome news Thursday that the government appears to have relented on pushing gambling tax levels to 35 percent from the original 7.5 percent, and is now proposing that the rate be set at 15 percent of GGR.

The proposed lower rate is contained in a bill tabled in Parliament Thursday by National Assembly Majority Leader Aden Duale, and reads:

“The Bill seeks to amend the Act (Betting, Lotteries and Gaming Act) to reduce the amount of betting and lottery tax payable by operators.”

The measure still has to be approved by parliament before it supplants the original tax imposition implemented in January this year (see previous reports).

Gambling companies have fiercely attacked the massive original tax increase, pointing out that it encourages illegal gambling and makes business viability almost impossible when added to the 30 percent corporate tax and legal requirement that they dedicate 25 percent of their sales to social causes like sports sponsorship.

Some operators shut down sponsorship programs as a result of the higher taxation, believed to be the highest in the region. The big tax hit also resulted in the premature closure just eighteen months after launch of the Pambazuka National Lottery.

Earlier this week the government proposed another gambling related tax – a 20 percent levy on players’ winnings – which is currently in the parliamentary system (see previous reports.)

The bill places the responsibility for collecting this tax on the betting companies in the form of a withholding requirement.