The Kenyan Parliament has approved a proposed amendment to the Finance bill, reducing excise duty on sports betting from 12.5% to 5%
Lawmakers also changed the way excise duty for the betting industry would be paid during yesterday’s third reading of the tax bill in parliament. This change moved the taxation point from the time a wager is placed to the time money is moved from mobile money wallets to betting accounts.
According to the parliament, the modification aims to strengthen tax enforcement, especially against overseas or online bookmakers that were challenging to keep an eye on under the prior framework.
By taking advantage of Kenya’s strictly regulated mobile money infrastructure, the new framework allows the government to collect excise duty before money enters platforms that frequently function beyond the purview of local regulations.
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“The current taxation regime is that when you have money in your mobile money account and then you transfer that money to the wallet of a betting company, the time of charging excise duty is when you place a bet.” MP Kimani Kuria, the chairman of the Finance Committee, said.
“There are so many entities operating virtually, some outside the country, from which we are not able to get the excise duty from them. This now means that every time a Kenyan transfers money from their mobile wallet to the wallet of the betting company, then that’s the time the excise duty is paid,” he continued.
The law requires betting operators to pay 15% of gross gaming turnover less the amount paid out to bettors as winnings, in addition to the excise duty on stakes and a 20% withholding rate on winnings.
The modification is consistent with the main goal of this year’s Finance Bill, which is to close collection gaps rather than enact additional taxes in order to boost revenue.
