Gamblers to pay KRA 20pc of stakes before betting

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National Treasury Cabinet Secretary Ukur Yatani addressing the media at parliament buildings after unveiling the Sh3.3 trillion Budget on April 7, 2022.

Gamblers will pay a fifth or 20 percent of the cash they have set aside in their wallets for betting in a proposed tax aimed at curbing the practice that has become a near-national pastime.

Treasury Cabinet Secretary Ukur Yatani has proposed to heavily tax punters by raising the excise duty on cash wagered on betting, gaming, prize competition and buying a lottery ticket from the current 7.5 percent.

If approved by MPs, betting firms will be required to withhold and forward Sh200 out of every Sh1,000 wagered regardless of whether the punter wins or loses.

The higher tax is part of proposed changes to the Excise Duty Act through the Finance Bill 2022 that targets to raise Sh50.4 billion in new taxes to help fund Sh3.31 trillion budget for the year starting July 2022.

Mr Yatani says gambling and gaming have become “extremely addictive and can result in a variety of harmful repercussions, especially to the youth”.
The 20 percent tax was introduced in 2019, but betting firms successfully lobbied legislators to remove it a year later through changes to the Finance Act 2020.

“The First Schedule to the Excise Duty Act, 2015 is amended … in Part II (on excisable services) by deleting the expression ‘seven-point five percent’… and substituting therefor the expression ‘twenty percent’,” Mr Yatani wrote in the Finance Bill 2022.

This is the second year in a row that the Treasury is seeking to return the 20 percent duty on the amount staked after MPs shot down a similar bid in the Finance Bill 2021, and reduced the duty to 7.5 percent.

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The proposed 20 percent tax will apply from July 1 if passed by the MPs before the House breaks on June 9 ahead of the August elections.

Gamblers also pay a 20 percent tax on winnings that betting firms are required to withhold and remit to the taxman. This means that if one wins Sh10,000, he or she will receive Sh8,000 as the KRA takes Sh2,000.

NOTE CYBER BET and Linebet do not charge tax and you can DEPOSIT via MPESA

This is besides corporate income taxes levied on the gambling and gaming business. The betting industry has become one of the targets for ‘sin’ taxes which the government levies on goods and services considered harmful, costly to the society or morally suspect.

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