Kenya's new government is considering setting up a national lottery and will ramp up tax collection as the country looks for ways to stimulate growth.
Exploring a national lottery is aimed at “further harnessing the potential of the sports and arts industry”, according to Kenya’s draft 2023 Budget Policy.
The statement was published on January 18 and outlines a series of measures aimed at driving economic recovery to 6.1 percent growth in 2023 from an estimated 5.5 percent in 2022.
More immediately, officials will look to tighten the state’s ability to collect gambling taxes.
“As part of the economic turnaround plan, the government will scale up revenue collection efforts by the Kenya Revenue Authority (KRA) to Ksh 3.0trn (€22.2bn) in the FY 2023/24 and Ksh 4.0trn over the medium term,” according to the draft budget.
To achieve this, the government will undertake a combination of both tax administration and policy reforms, including fully rolling out an electronic Tax Invoice Management System (eTIMS), which allows for taxes to be taken from transactions in real time.
The commissioner for domestic taxes at the KRA told VIXIO GamblingCompliance that the government is already working with gambling companies to enable them to remit their taxes in a real-time or near real-time basis.
“Integration is being done in batches of taxpayers in two phases namely: daily tax remittances and real-time data transmission,” the KRA commissioner said.
The first phase has seen daily remittances on excise duty and withholding tax on winnings, which started mid-November 2022 after a successful pilot. So far, 13 gambling companies have been onboarded.
The second phase, which covers real-time data transmission from gambling companies, is expected to commence by the end of January 2023.
“It is expected that by the end of March 2023, all betting and online gaming operators will be transmitting both daily payments and transactions data, real-time. The targeted tax heads are Excise Tax (7.5 percent on Stakes) and Withholding Tax (20 percent on Winnings),” the KRA said.
The prospects for the potential national lottery also laid out in the draft seem less certain.
This is not the first time Kenyan politicians have considered introducing a national lottery, after the Gaming Bill 2019 included provisions for creating one. However, three years later there have been no signs of a national draw being created.