Gamblers playing in Kigali, Rwanda, the government has increased the tax on Gross Gambling Revenue (GGR) from 13% to 40%.
In a move aimed at promoting responsible gambling, the government has increased the tax on Gross Gambling Revenue (GGR) from 13% to 40%, Minister of Finance and Economic Planning Yusuf Murangwa said in a presser on Tuesday, February 11.
This represents a 27-percentage-point hike. Additionally, the withholding tax on winnings will rise from 15% to 25%, a 10-percentage-point increase.
The GGR tax applies to the total income gambling operators earn after paying out winnings. By increasing this tax, the government aims to curb excessive gambling and ensure higher revenue redistribution.
The withholding tax on winnings, deducted before payouts, means that gamblers will now see a larger portion of their earnings go to taxes, further discouraging frequent betting.
Previously, under the 2012 law governing gaming activities, the tax on gross gaming revenue stood at 13%, while the withholding tax on winnings was set at 15%.
A report from the Rwanda Revenue Authority (RRA) shows that gambling operators generated over Rwf21 billion in revenue in 2023, yet contributed only around Rwf2.3 billion in gaming tax.
Additionally, they generated approximately Rwf1.2 billion from taxes on wages and Rwanda Social Security Board (RSSB) contributions. Three companies accounted for more than 60% of this revenue.
Overall, the total amount staked in 2023 reached approximately Rwf252 billion, with winnings totaling Rwf230.8 billion. Three companies dominated the sector, controlling around 80% of the revenue.
“This data highlights that gambling companies are securing substantial earnings, necessitating increased taxation for fair redistribution,” an official from RRA noted.
By raising the GGR tax rate, the government aims to reduce the financial incentives for frequent or high-earning gamblers while promoting responsible gambling behavior.
New policy to strengthen industry regulation
Experts emphasize that the newly approved gambling policy should enhance industry safety and regulation. The policy is expected to inform new laws and lead to the establishment of regulatory institutions focused on minimizing social harm, maximizing economic benefits, and strengthening oversight.
Dr. Jean Pierre Ndagijimana, a psychologist at Solid Minds Counselling Clinic in Kigali, highlighted the mental health risks associated with gambling. He warned that gambling addiction progresses from habitual betting to a full-blown disorder, often leading to severe family and financial conflicts.
“It’s crucial to address gambling addiction as a mental health issue. Unchecked gambling can result in devastating consequences for individuals and families,” he said.
