The proposed betting taxes are set to be shelved following the intense lobbying against higher levies for the industry during the review of the Finance Bill.
The inclusion of wagered amounts in the computation of withholding tax was met by great opposition during the submission of public comments with the finance and national planning committee of the National Assembly indicating more than 10 submissions were against amending the definition of winnings.
Apart from the Association of Gaming Operators of Kenya, others opposing the new definition included Anjarwalla & Khanna, the Law Society of Kenya, PKF, Grant Thornton, the Institute of Public Finance, the Kenya Private Sector Alliance and the America Chamber of Commerce.
Therefore, the finance committee has amended the proposed hike to excise duty on betting to a rate of 12.5 percent from the previously recommended rate of 20 percent.
Currently, the duty on betting stands at 7.5 percent.
Should the proposed amendments pass through the floor of the House, taxation of the wagered amount will stand at 12.5 percent or Sh12.50 for every Sh100 staked.
Meanwhile, the wagered amounts will not be included in taxing winnings. The association of gaming operators argued the treatment of wagered amounts as gains would amount to double taxation.
“Amending definition of winnings will discourage punters for it is double taxation as the stake is already being charged with excise tax,” it said.
In deleting the proposal on the definition of winnings, MPs will be cushioning themselves against potential litigation with the tax appeals tribunal having previously administered a ruling in favour of separating wagered amounts from winnings.
