Kenya Gambling Tax Collection Up 30 Percent

June 14, 2023
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The Kenya Revenue Authority said it has collected a total of KSH8.7bn (€57.68m) from gambling firms over the past six months, a 30 percent increase over the same period last year.

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The Kenya Revenue Authority (KRA) said it has collected a total of KSH8.7bn (€57.68m) from gambling firms over the past six months, a 30 percent increase over the same period last year.

The boost to the country’s Treasury is down to licensed gambling operators being integrated into the Electronic Tax Invoice Management System (eTIMS), which allows companies to remit their taxes on a real time or near-to-real time basis.

Jane Makau, the Betting Control and Licensing Board (BCLB) chairperson, praised the KRA for helping to streamline tax collection from the industry.

“With integration, the daily visibility is providing daily trends upon which compliance measures can be taken,” Makau told local media.

The eTIMS not only works as a tax collection system but is also designed to help operators be more compliant with responsible gambling measures, such as preventing minors from gambling and monitoring player behaviour.

There are now a total of 87 operators signed up to eTIMS, the KRA recently told local media. The KRA had initially expected all operators to be signed up by the end of March 2022.

Operators have been looking to sign up since October 2022, when Kenya’s government ordered all gambling companies to sign up to eTIMS.

Since then, groups of operators have been signed up to the system in different stages.

In March 2020, a spokesperson for the KRA said that since the implementation of the directive in November 2022, “16 operators have been onboarded with tax collections to date amounting to over KSH$5bn (€36.1m)".

Comparatively, in June 2022, National Treasury figures revealed it managed to raise just KSH3.4bn for the year. The National Treasury had expected to raise KSH5.4bn in 2022.

Operators currently have to pay a 7.5 percent tax on bets and a withholding tax of 20 percent on winnings.

However, Kenyan legislators are busy debating the country’s Finance Bill 2023, which includes a raft of excise duty increases.

If passed in its current form, the excise duty on betting, gaming and prize competitions would increase from 7.5 percent to 20 percent. The bill also proposes to increase the lottery excise duty from 7.5 percent to 20 percent.

KPMG’s analysis of the bill states: “The increase in excise duty on betting, gaming, prize competition and lottery is aimed at curtailing the consumption of services that are considered detrimental to the citizens.”

Additionally, the bill includes a 15 percent excise duty fee for advertising on television, in print media, on billboards and radio stations, which would apply to alcoholic beverages and all forms of gambling.

The Media Owners Association of Kenya has asked the government to remove the proposed ad tax increase, warning in an open letter that the change would result in job losses in the media sector.

There has also been a large amount of political backlash against the proposed Finance Bill, mainly by critics who fear the impact multiple tax increases at once will have.

Increasing the amount of taxes raised by the government has been key in ongoing negotiations between the country and the International Monetary Fund (IMF), which just recently agreed to loan cash-strapped Kenya €927m.

Speaking during a development tour on March 21, President William Ruto said the tax increases included in the bill, which also came under fire prior to the hearings from opposition legislators and some business owners, will improve the lives of Kenyans and touted a housing programme that he said will “provide at least one million jobs”.

A decision on the bill has become a matter of public interest in Kenya and is due before June 30, 2023.

Separately, Kenya’s government has been advancing plans to update its gambling laws and increase revenue collection from the sector, opening consultations on three landmark bills.

The draft Gambling Control Bill 2023 and the draft National Lottery Bill 2023 have been published on the recently created National Lottery Taskforce’s website. Alongside the bills, the taskforce has also published a draft gambling policy for Kenya in 2023.

The Gambling Control Bill includes updates to existing advertising, licensing and enforcement rules, covering all forms of gambling, including online.

Additionally, it would create a Gambling Regulatory Authority, which would replace the existing Betting Control and Licensing Board, which will have a wide range of tasks including issuing licences, as well as monitoring and developing policies.

There has been no update on the taskforce’s websites since March; however, the consultations closed at the end of April.

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