Kenyan government considers 15% gambling tax

Kenya’s parliament is reportedly considering reducing the country’s tax on gambling revenue from 35% to 15% following pressure from gambling operators in the country.

In addition to reducing the tax rate to 15%, the tax share which had previously been directed towards social causes in Kenya is now to be reduced from 25% to 5%.

Officials from the Kenyan government’s National Finance and Planning committee had previously intended to introduce this reduction in the Tax Laws (Amendment) Bill 2018 in June, but later removed the reduction from the final bill after facing hostility from fellow MP’s.

Also included, but later shelved, were measures to force Kenyan gambling operators to withhold 20% of players’ winnings on behalf of the taxman.

This latest attempt to reduce the tax is included in the Finance Bill 2018.

However, the 20% withholding tax on winnings, first proposed in the previous Tax Laws (Amendment) bill has not been reintroduced.

The 35% tax rate, first introduced in January has not been popular with many operators, who have claimed it halves their profits.

One of the biggest Kenyan operators, SportPesa terminated its sponsorship of Kenyan sports after mounting an unsuccessful legal challenge against the tax rate but has since renewed a proportion of its deals.

The news comes amid calls from the Kenya Film Classification Board (KFCB) to impose a gambling advertising ban to protect minors from gambling addiction.

According to the Communication Authority of Kenya, the advisable water-shed period suitable for family listening and viewing content is from 5am to 10 pm, with the KFCB calling for a ban on gambling ads during this period

KFCB CEO Ezekiel Mutua has threatened to take legal action against operators who air gambling ads during this period saying that “stern” action will be taken against both gambling operators and the media companies which produce the ads.