Government to Re-introduce 20% Tax on Betting Stake

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Budget, Betting

The National Treasury and Planning Cabinet Secretary Ukur Yatani, on July 2, issued a statement regarding the recent enactment of the Finance Act, 2020, that saw the abolishment of the 20% tax on betting winnings, stating that his ministry was working towards ensuring the various taxes were maintained.

“Following various consultations and in line with the Government’s commitment on mitigating against the social vices associated with betting activities, the National Treasury and Planning will be proposing to the National Assembly, the reintroduction of the excise duty on betting within the next six months.

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“Betting activities in the country have adversely affected the social fabric of our society, particularly the youth. In this regard, we wish to reiterate the commitment of the government on taxation of this industry so as to contain such vices. In particular, the government in 2018, introduced betting tax at the rate of 15% on betting companies and 20% withholding tax on winnings,” CS Yatani’s statement reads in part.

The CS further revealed that the introduction of the excise duty on betting at the rate of 20% of the amount staked in 2019, led to various petitions by the players in the industry, seeking to have the taxes reduced.

However, the treasury CS maintained that the government’s position had not changed regarding the vices associated with betting, adding that his ministry was working towards ensuring that the various measures implemented over the last year were maintained under the new Finance Act, 2020.

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“The National Treasury and Planning has noted the various reports in print media alleging that the Government has reneged on its commitment on taxation of the betting industry. This follows the enactment of the Finance Act, 2020, that removed excise duty on betting.

“As noted in the print media, the excise duty was removed through the Finance Act, 2020. The removal of this tax happened during the Committee Stage of the Bill,” the statement further reads.

Punters were nervously optimistic over the possible return of popular sports betting firms, Sportpesa and Betin, after President Uhuru Kenyatta’s Finance Act, 2020, Bill scrapped off stringent tax measures that saw the two firms exit the country in September 2019.

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Interior CS Fred Matiang’i, who was the tip of the spear that pushed for the taxation of betting firms, recently reiterated his stance on the same adding that non-compliant companies would not be allowed to operate in Kenya.

However, the National Assembly Finance and National Planning Committee which proposed the change to the excise duty charged on betting, stated that the tax negatively affected the industry and Kenya’s economy.

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“This is to reverse the negative effects of this tax on the industry, which has led to the closure of betting firms in Kenya yet international players continue to operate,” the MPs proposed.

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