The Parliament in Kenya recently introduced a draft of the Tax Laws (Amendment) Bill 2018, which would require gambling operators to withhold 20 percent of players’ lottery, wagering and gaming winnings in taxes. The government dropped similar withholdings in 2016 due to numerous implementation problems, but claims those issues have been resolved.
In addition, last summer a law was approved raising taxes on gambling operators’ revenue from 7.5 percent to 35 percent, effective January 1. Soon after, the Pambazuka National Lottery, which had been paying 5 percent tax on revenue, suspended its Kenyan operations. Both Pambazuka and sports betting operator SportPesa sued, stating the law was unconstitutionally approved.
Gambling operators have been trying to negotiate with the government to lower their tax burden and make sure Kenyan-licensed operators remain competitive. Observers said the proposed winnings tax could be a response to that. However, last summer government officials stated the tax hike was meant to slow gambling expansion in the country, especially among youth, since the winnings tax would reduce the appeal of gambling.
