Taxman to slap 20 per cent levy on gambling winners

Kenya Revenue Authority is to impose a 20 per cent withholding tax on winnings from gaming as it seeks to bring more people in to the tax bracket.

Currently the taxman only levies a 16 per cent tax on the gaming company leaving winners untaxed.

Speaking at a Mocality Business Conference at the KICC in Nairobi, Mr David Gichohi, a senior KRA official noted that there was no way that winners can be taking 100 per cent of the money without paying taxes.

The levy of withholding tax on gamming winners is scheduled to commence next year.

“We have to agree with betting companies on the modalities of tax remittances,” he said.

KRA has over the past 10 years been working to enlarge the taxpayers base by focusing on areas where people are earning but remain untaxed.

However Casinos have expressed their opposition saying the industry is already heavily tax and would be rallying its members to oppose the move.

“We are already paying 16 per cent tax on winnings, an addition 20 per cent is a lot,” said Ms Fridah Mwebia Manager at Paradise Casino at Safari Park.

“Our members will meet in December to discuss on what steps we are going to take against this move.” she said.

The Association of Gamming operators-Kenya (AGOK) says their members are opposed the new tax and have presented their view to the parliament budget committee due to its impracticality.

“If they (KRA) want, they should levy the 20 per cent tax directly to the winning customers. But, if it is directed to the Casino, it is impractical,” a manager at Babylon Casino in Nairobi who did not want to be quoted, said, noting that they have no problem paying taxes, but it was a question of how workable the tax system was.

This will not be the first time KRA will be attempting to increase the tax on gaming, a previous pushed to introduce a five per cent excise duty failed after the members moved to court seeking suspension of the tax and won.

The conference was about the need for firms to embrace e-commerce in marketing their products and services to take advantage of the over 12 million internet users, since this is a bulk of the client base that businesses need to capitalise on.