KES 5.8 billion tax collected from 16 betting firms since November 2022 – KRA

The Kenya Revenue Authority (KRA) collected KES 5.8 billion from 16 betting firms since mid-November 2022, the Authority has said.

This comes after the tax collector integrated its systems with those of the firms following a directive issued in October 2022.

The integration was done in batches of taxpayers in two phases, namely, daily tax remittances and real-time data transmission.

The first phase, which involved daily remittances on Excise duty and Withholding tax on winnings, commenced in mid-November 2022 after a successful pilot, and 16 companies have been onboarded.

The second phase began at the end of January 2023, and data on betting and gaming transactions are being received from the 16 firms already onboarded. Payments are received every morning by 7:30 am.

The move is aimed at increasing transparency and accountability in the betting and gaming industry, ensuring that the government collects its fair share of taxes.

The introduction of real-time or near real-time tax remittance is also expected to improve tax compliance among betting and gaming companies and ensure that they contribute to the country’s economic growth.

According to KRA, the real-time or near real-time tax remittance will provide a win-win situation for both the government and the betting and gaming industry, as it will help the industry to thrive while ensuring that the government receives the taxes it is due.

KRA noted it has collected KES 15.8 billion so far in the current financial year, against a target of KES 24 billion. Last year, KRA collected KES 21 billion in taxes from betting.

The Kenyan gambling market has an estimated gross turnover of KES 50 billion as of June 2022, with over 170 firms licensed to operate in the country. Online betting and gaming are the most popular products offered in the Kenyan marketplace, although physical betting shops and land-based casinos are also available.

Lotteries are also popular, and the proceeds of the withholding taxes (Withholding tax on Winnings and Excise Duty) are paid into the Sports, Arts and Social Development Fund established under the Public Finance Management Act, 2012.

The integration of betting firms with the KRA systems is being implemented in phases, starting with the top companies based on total betting taxes revenues in FY 2021/2022. The next step is to onboard all the active betting and online gaming firms across the country, with 20 companies already identified for onboarding.

Commenting on the development, KRA said, “The targeted tax heads are Excise Tax (7.5% on Stakes) and Withholding Tax (20% on Winnings). Taxpayers are expected to integrate their systems with the Kenya Revenue Authority (KRA) systems to enable real-time or near real-time tax remittance.”

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