What is being recommended?
In the Treasury’s 2022 Finance Bill, the government outlines its intention to raise the taxes on betting stakes from 7.5% to 20%. Everything covered under this tax includes betting, lotteries, gaming, and “prize competitions”. Plus, a 15% excise on gambling advertisements is to be proposed.Experts are speculating that the move is an attempt to excise taxes and “bride the revenue gap” that growing inflation is causing.
The history of the gambling tax
The stake tax has long since been a subject of controversy for Kenya since brought to the forefront by a doubling of the rate from 10% to 20% in 2019. This caused large betting brands Sportpesa and Betin to leave the market in Kenya.However, the Parliamentary Finance Committee noted in 2020 that the higher rate of tax led to less tax revenue, mainly due to the large betting companies leaving the market. Therefore, it was recommended that the tax is entirely scrapped, which was accepted and signed by President Uhuru Kenyatta.
But not all were impressed with the move and others started working on getting the tax back, so the 2021 Finance Bill was put into place, initially with the 20% tax, and then back down to 7.5%.
And that brings us to today where there is another recommendation from the Treasury to amend the tax back up to 20%, as well as adding lotteries to the tax base.