This archive report was first published on 7 August 2019.
Kenya's betting industry has been in the spotlight since the introduction of a 20 percent withholding tax on winnings, as mandated by the Finance Act 2018.
Despite a court order in April that barred betting firms from deducting and remitting the tax until a case challenging the taxation of winnings is heard and determined, the firms have started complying with the directive from the Government.
For instance, BetLion has notified its customers that it will be deducting 20 percent from their winnings and remitting it to the Kenya Revenue Authority (KRA).
“This means that customers will now get 80 percent of the potential winnings going forward. As a business, we hope that customers continue to engage in responsible gaming,” said BetLion.
According to KRA, betting companies are required to withhold winnings at a rate of 20 percent, meaning that if a gambler wins Sh50,000, they will only receive Sh40,000, with the balance of Sh10,000 withheld by the betting company and later remitted to KRA.
However, critics argue that the tax will disproportionately affect poor and unemployed youths who are the majority of gamblers, leading to massive losses on their bets.
“We can’t have a serious government taxing the gamblers, we all know that all of these companies are involved in soft fraud and match-fixing to boost their profits. We ought to have a government that discourages the youths from betting and gambling, not one that overtaxes the already overtaxed gambling generation and nation,” said a critic.
