Kenya Reduces Betting Tax to 15%

Kenya Reduces Betting Tax to 15%

September 26, 2018
Staff Writer
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An operators’ tax rate will be decreased from 35% to 15%.

The 2018 Finance Bill was approved by the country's Parliament last week.

Good news for betting operators in Kenya, as the government decides to lower the betting taxes.

Last week, the 2018 Finance Bill was approved by the country's Parliament, while the President of Kenya Uhuru Kenyatta signed the new piece of legislation only a day later.

An Important Change

The newly-adopted Bill introduces several important changes, but probably the most relevant one, at least for betting operators, is the decrease in operators’ tax rate from 35% to 15%. In addition to this cut, the lawmakers imposed a new tax of 20% on bettors’ winnings.

According to the government officials, the new tax policy is estimated to bring around $300 million to the state coffers on a yearly basis. On the other, hand the opposition was fiercely against this move and clearly expressed their discontent during the session held on Thursday.

The new indirect taxes will have a significant impact on the locally-licensed online betting operators, with a 15% tax on internet and a 20% tax on money transfer fees.

This reduction comes only a year after the country's lawmakers increased all gambling-related taxes to a rate of 35%. This tax regime came into force on January 1 this year and seriously affected the local market. Many gaming companies went out of business in a short period of time, claiming their operations were no longer economically viable.

Finally, a Successful Attempt

A number of efforts were made to lower the 35% rate for betting operators but without any results. Fortunately, the latest attempt was successful, and will definitely be welcomed by the remaining betting operators in the country.

The new tax on bettors’ winnings isn't technically new, since it received the green light two years ago, but wasn't implemented since there was a number of issues regarding collection of these payments.

On the same day the new legislation was approved, gaming operator SportPesa announced it would pay sponsorship money to football club Gor Mahia in advance since the team had been unable to pay its playing and coaching staff.

Commenting on the operator's decision to do so, Ronald Karauri, Chief Executive Officer at SportPesa said the company would advance the sponsorship money to take care of whatever issues the club had.

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