BCLB Proposes New Taxes on Betting to Help Fight Gambling Addiction

The Betting Control and Licensing Board (BCLB) has set its sights again on betting firms with two new taxes lined up. BCLB states the new taxes will help fight gambling addiction among the youth in Kenya. Funds raised will be used to run gambling addiction campaigns and set up rehabilitation centres.

“The Collector shall pay all the proceeds of tax paid under subsection (2) into the Sports, Art, and Social Development Fund established under the Public Finance Management Act, 2012”

– BCLB says in the draft Bill.

Provisions for the two proposed taxes exist in the draft Gambling Control Bill, of 2023. Thus, the regulator wants to charge a gambling tax at the rate of 15 percent of a betting firm’s gross gaming revenue. Furthermore, BCLB proposes a one percent monthly levy on the same revenue. The proposed taxes shall be paid to the Kenya Revenue Authority (KRA) on or before the 20th day of the following month.

BCLB Adding to Existing Taxes

Currently, Betting firms pay income tax at the standard rate of 16 percent. Additionally, the firms pay annual license and compliance fees. Firms must pay these mandatory fees to get BCLB accreditation. Furthermore, Betting firms pay corporate tax on profits at a rate of 30 percent.

Taxes do not end there, KRA also requires the firms to withhold 20 percent of the winnings paid out to punters, adding to the 12.5 percent on every betting stake. This is paid in real-time or near real-time due to integration with KRA’s iTax system.

For the financial year ending June 2023, KRA collected Ksh6.64 billion in excise taxes. This marked an increased collection compared to KSh5.1 billion raised a year earlier. As of June 2022, the industry had a gross turnover of around KES 50 billion making it a profitable sector.

Thus, the industry keeps attracting new entrants with 10 new betting companies given operating licences recently. The Kenyan betting companies recently licensed are 44bet, Savvybet, Tigonbet, Chapbet, Betmo, Play2Net, Clarity Limited, Betkali and Ealotto.

At the moment, Kenya is among the leading countries in Sub-Saharan Africa with a growing market share in the betting and gaming industry.

The draft Gambling Bill is set to be opened for public comments before it can be tabled in Parliament. It is expected the betting firms will challenge the proposals. Earlier this year, the firms successfully petitioned lawmakers to drop the proposed 20 percent excise tax on betting stakes.

Source: techweez.com

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