Home Eastern africa Kenya Kenyan Betting and Gaming Warns Against More Taxes

Kenyan Betting and Gaming Warns Against More Taxes

0

Kenyan betting and gaming industry has issued a dire warning about the potential impact of proposed tax changes in the Finance Bill 2024. According to industry representatives, the introduction of a value-added tax (VAT) on betting and an increase in excise duty to 20% risks triggering the disappearance of at least 80% of all sportsbook bets in the Kenyan market.

The Finance Bill 2024 proposes the deletion of the VAT exemption for betting, gaming, and lottery, as well as an increase in the excise duty rate from the current 12.5% to 20%. Industry stakeholders argue that these measures would render investment in the sector unviable and trigger capital flight.

“The betting sector pays Sh1.6 billion per month in the form of taxes to the exchequer through excise duty, betting tax, and withholding tax on winnings,” the consortium told the National Assembly’s Finance and Planning Committee during its submissions on the Finance Bill 2024. “The top seven betting companies have paid in excess of Sh10 billion, including corporate income tax, for the first six months of 2023/24 to the exchequer. These revenues are largely driven by sportsbook betting, and the consortium is concerned that with the introduction of VAT and an increase in excise, approximately 80% to 85% of sportsbook bets will disappear.”

Data presented by the consortium shows that gross gaming revenue in Kenya has been on a general decline, falling from Sh46.8 billion in the financial year 2018/19 to Sh17.4 billion in 2022/23. In the same period, betting tax collected by the Exchequer has fallen from Sh7.0 billion to Sh2.6 billion.

The consortium has warned that the proposed tax measures risk collapsing the industry, wiping out the remaining revenues and tax income. They argue that in Africa, apart from Ethiopia and South Africa, no other country charges VAT on betting services, and even those countries do not charge excise duty on betting.

“Ghana had introduced VAT on betting services but scrapped it on January 1, 2023, following a dramatic reduction in onshore betting and tax revenues,” the consortium told the parliamentary committee.

Industry stakeholders are calling on the government to reconsider the proposed tax changes, warning that they could have devastating consequences for the sector and the broader Kenyan economy.

NO COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Exit mobile version