A High Court in Kenya has maintained that betting companies and their clients have to pay a 7.5% excise duty on gambling stakes in the country, throwing out the lawsuit brought against the Kenya Revenue Authority by putters and betting firms. Judge George Odunga of the Machakos High Court dismissed the petition and claims that the gambling tax amounts to double taxation as betting companies already pay 15% of their gross gaming revenue and punters 20% withholding tax on winnings.
According to the judge, an issue of double taxation does not arise since it is paid when punters place a bet and the withholding income tax is paid upon winning. In his ruling, Judge Odunga ruled “Whereas the two taxes may well impose burdens on the taxpayer, that does not make them unconstitutional. I have found that in betting transactions, it is proper to levy excise duty on the stake.”
Five betting companies: Betika, Betway, Odibets, Sportpesa, MozzartBet and Association of Gaming Operators filed the suit against Parliament and Kenya Revenue Authority, arguing that other deposit platforms like M-Pesa and bank accounts were not subjected to similar taxes.
Betting in Kenya is a $20 million market and a 2021 FinAccess Household Survey states that one in every Kenyan between the ages of 18 and 25 engages in frequent betting activities. Although the government has started a policy to reduce gambling, especially among Kenyan youth, licensed betting firms increased by 31.5% last year.
The KRA tax demands that betting companies pay 75 shillings from every 1000 wagered, regardless of whether the punter wins or loses.
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