The Kenya Revenue Authority headquarters at Times Towers, Nairobi. FILE
What you need to know:
Kenya Revenue Authority says all gambling winnings shall be subject to a 20pc withholding tax with effect from January 1, 2014.
The Kenya Revenue Authority (KRA) is eyeing tax on gamblers' winnings as it seeks to expand its revenue base.
In a notice published on Monday, KRA said that the Finance Act 2013, which was signed into law last year, amended the Income Tax Act to introduce withholding tax on winnings from gaming and betting.
Accordingly, betting and gaming agents will now be required to remit a fifth of winnings from both locals and foreigners to the taxman by the 20th of every following month.
"Such winnings, whether payable in cash or kind, shall be subject to withholding tax at the rate of 20 percent of the gross proceeds, if paid in cash or 20 percent of the fair market value of the winnings, if paid in kind," the notice read.
Payers of the winnings, the notice further read, will be required to deduct the withholding tax with effect from January 1, 2014 and remit the tax to the commissioner by the 20th of the subsequent month.
The Finance Act 2013 that President Uhuru Kenyatta signed into law in October amended the Income Tax Act to broaden its base to include, among others, earnings from gambling.
In the 2013 Budget Speech, Treasury Secretary Henry Rotich said that the withholding tax on winnings "should make the winners to equally contribute towards the Exchequer".
Gambling houses had earlier urged the government not to impose tax on winnings for fear that the move could see Kenya lose tourists to Tanzania and the Seychelles where earnings from gambling are not taxes.
A PwC report released last November projected that Kenyan casinos will earn Sh2.8 billion by 2017, a rosy outlook that may have caught the taxman’s eye.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
