Winners and losers of Kenya’s gambling tax reforms

Genesis was contracted by a corporate affairs and public policy advisory firm to independently measure the potential impact of proposed gambling tax reforms on the Kenyan economy.

The study was conducted urgently in one week with a restricted methodology. The aim of the study was to provide a high-level, objective impact assessment to inform the gaming industry’s response to the proposed amendments to the Finance Bill, and to open lines of conversation between stakeholders. Genesis works equally with governments and the private sector across the region and is known for independence and rigour.

The Kenyan Treasury Cabinet Secretary presented the Finance Bill, 2023 to Parliament on 28 April 2023 with proposed tax amendments to come into effect from 1 July 2023. A number of the proposed amendments will directly impact the betting, gambling and lotteries industry, most notably:

1. Changing the definition of “winnings” (Section 2(a) of the Finance Bill) from net winnings to gross winnings (which includes the stake). This has implications for the calculation of withholding tax payable on winnings.
2. Increasing excise duties on betting, gaming, lotteries and prize competitions from 7.5% to 15% (Section 43(b)(iv)-(vii) of the Finance Bill).
3. Reducing the excise duty remittance period for licensees from 21 days to 24 hours (Section 41(1) and (2) of the Finance Bill).
4. Exempting the exportation of taxable services from VAT, previously charged at 16% (Section 33(b)(v) of the Finance Bill).