Yesterday, the Kenyan Government revealed plans to once again introduce the 20% excise betting tax within 6 months.
As CasinoGamesPro reported, the provision was removed in the 2020 Finance Act which was officially signed by the country’s President Uhuru Kenyatta on June 30th. A couple of days later, on July 2nd, the Cabinet Secretary of the National Treasury, Ukur Yatani, confirmed that the 20% tax on betting was eliminated at the committee stage of the Bill. However, Mr. Yatani explained that gambling operators should not celebrate too early as the removal of the provision does not mean that the Government has changed its position on the tax.
The National Treasury Cabinet Secretary further shared that the Kenyan Government is still committed to tackling gambling-related social vices, as well as the negative impact that betting has, especially on younger people. In a statement, he confirmed that the National Treasury plans to propose the reintroduction of the 20% excise duty on betting services to the National Assembly within the following 6 months. Mr. Yatani explained that the decision has been made after consultations in line with the Government’s intentions to face the issue.
Back in 2018, the Kenyan Government introduced a 15% duty on betting companies and a 20% withholding tax on the winnings generated by local punters. A year later, it introduced the 20% excise duty on the amount wagered.
The Proposed 20% Excise Duty on Betting Faced Criticism by Local Gambling Companies
Mr. Yatani has reminded that the Government has faced constant pressure by players in the industry to reduce that tax. Eventually, the tax was removed by the Finance Committee after a company that has not been named said that many betting operators were hurt by the tax, which also made them cut down on their sponsorship agreements with local sports clubs. Furthermore, the committed agreed to the demand, saying that the high levels of taxation had pushed Kenyan punters to foreign gambling websites that do not pay any tax to the Government.
Lawmakers challenged the arrangement, claiming that it was counterproductive for the country, as it basically denied the Government some tax revenue. According to Members of Parliament, if the tax is imposed, it would reverse the negative effects on the sector, such as the closure of Kenyan betting operators.
A number of betting companies were forced to cease operations in 2019 in a longstanding fight against the Kenya Revenue Authority (KRA) following the decision of the Treasury to impose a 10% excise duty on winnings, which was later boosted to 20%.
Apart from that, the Government is soon expected to pass its 2019 Gaming Bill. Under the latter’s provisions, several new taxes are set to be imposed on gambling companies that operate on the territory of Kenya. As revealed by Victor Munyaka, the former Chairman of the Sports Committee, who has been processing the proposed piece of legislation, explained that the Bill does not include the excise duty tax in its components. Mr. Munyaka explained that the excise duty affected punters in a negative way, so it was a good thing that the Committee decided to dispose of it.
