Economy

Relief for betting firms as MPs cut two levies in gambling Bill

betting

Betting firms have been handed a reprieve after a Parliamentary committee cut taxation rates of two new levies proposed in the Gambling Control Bill. FILE PHOTO | NMG

Betting firms have been handed a reprieve after a Parliamentary committee cut taxation rates of two new levies proposed in the Gambling Control Bill.

The National Assembly Committee on Sports has recommended a reduction of the gambling levy to 13 percent from 15 percent of the gross gaming revenue and the removal of the gaming tax that was to be charged at a rate of one percent of the same revenue.

Read: 10 firms join the battle for betting billions

The government proposed the two taxes in the Gambling Control Bill, 2023 in an effort to cut the appeal of the Kenyan betting market to firms and stem the gambling craze.

Adoption of the committee’s proposal will be a major boost to betting firms whose revenues have been under State onslaught in recent years through increased taxation.

“Introduction of additional taxes or levies will lead to shutting down of business activities by legal gambling and betting operators, encourage the boom of illegal markets and consequently result in the reduction of revenues to the State,” the committee says in the report.

Betting firms are currently taxed on the gross gaming revenue —turnover minus winnings paid out— at a rate of 15 percent. They also pay corporate tax on profits at a rate of 30 percent. Gamblers pay withholding tax at the rate of 20 percent on every winning bet in addition to an excise tax of 12.5 percent per betting stake.

Betting firms through their lobby, the Association of Gaming Operators had petitioned Parliament to drop the two taxes on grounds that the gambling industry is already grappling with over-taxation.

Lawmakers are now expected to consider and adopt the report that will set the stage for the passage into law of the Bill.

Read: Ten new betting firms enter market within two months

The two taxes were to be charged on the gross gambling revenue of the betting firms, in what would have further eroded their earnings.

Betting firms have over the years grappled with thinning earnings amid the increased taxation and gamblers dropping or reducing the amounts used to bet.

[email protected]