House committee in fresh bid to halve betting levies to 15pc

Betting firms look set to get a tax reprieve after a House committee revived a bid to have the tax on gaming reduced from 35 per cent to 15 per cent.

A customer on a slot machine at a casino in Eastleigh, Nairobi. FILE PHOTO | NMG  
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Betting firms look set to get a tax reprieve after a House committee revived a bid to have the tax on gaming reduced from 35 per cent to 15 per cent.

The Finance and Planning Committee has reintroduced the amendments through the Finance Bill 2018 after shelving a similar bid in June through the Tax Laws (Amendment) Bill 2018. The committee is also proposing to cut the share of sales that betting firms channel for social causes and charity from 25 per cent to at least five per cent, giving further relief to gaming firms.

“Section 29 of the Betting, Lotteries and Gaming Act is amended in subsection (1) by deleting the expression “thirty-five” and substituting therefor the following new paragraph-at least five per cent of the gross proceeds of which of which is to be devoted to the object for which the lottery is promoted,” says the committee in proposed amendments to the Finance Bill, 2018. The Joseph Limo-chaired committee faced hostility from MPs in June when it proposed the cutting of gaming tax to 15 per cent down from the current 35 per cent.

MPs voted to shoot down the Treasury’s proposal to reduce tax, which would have seen gamblers also spared the pain of paying 20 per cent tax on their winnings, which the Finance ministry had proposed to cover for the halving of the gaming tax.

READ: Reprieve for betting firms after MPs back gambling tax review

The MPs reckon that increased taxes will curb exponential growth of gambling that was hurting the young and vulnerable. Before January 1, lotteries were taxed at five per cent of their sales, betting firms at 7.5 per cent, casino gambling 12 per cent and competitions like raffles 15 per cent besides other taxes and levies.

The betting firms say the 35 per cent would hurt their business and create a black market for betting.

Besides the 35 per cent tax on revenue, betting firms pay 30 per cent corporate tax and dedicate 25 per cent of their sales to social causes like sports sponsorship as a legal requirement.

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