Lowered betting excise tax in Kenya to 5%, sparking concerns over potential increase in gambling addiction
In a move aimed at regulating the betting industry and improving tax collection efficiency, the National Parliament of Kenya has passed the Finance Bill 2025, which includes significant changes to the tax implications for sports betting.
One of the most notable changes is the reduction in the excise duty on bets from 15% to 5%. This means that bettors will now pay just Sh5 in tax per every Sh100 wagered, a significant relief from the previous Sh15 tax per Sh100 wagered.
However, the taxation point has shifted from the moment a bet is placed to when funds are transferred from a mobile money wallet into a betting operator’s account. This new system leverages Kenya’s tightly regulated mobile money infrastructure to improve tax enforcement, especially against foreign or virtual betting platforms that were difficult to monitor previously.
Despite lowering excise duty on betting stakes, Kenya maintains a 20% withholding tax on winnings. This means that when a player withdraws their winnings, 20% tax is withheld at source.
In addition to player-related taxes, betting operators continue to pay a 15% gross revenue levy on their betting business, ensuring the government taxes the operators’ earnings as well.
The new tax structure aims to balance tax relief for bettors with continued government revenue from the growing betting sector. At the same time, the shift in enforcement mechanisms helps clamp down on tax evasion by unlicensed or offshore operators.
Here is a summary table of the current tax elements:
| Tax Element | Current Rate | Taxation Point/Focus | |----------------------------------|-------------------------|--------------------------------------------| | Excise duty on stakes | 5% | On transfer of funds from mobile money to betting account | | Withholding tax on player's winnings | 20% | On withdrawal of winnings | | Gross revenue levy on operators | 15% | On operators' gross revenue |
These changes in the Finance Bill 2025 may result in larger sums being paid out due to increased betting amounts, but they also ensure a more regulated and tax-compliant betting industry in Kenya. The government's responsible gaming strategy is reflected in the reduced excise duty, but it is not explicitly stated as a part of the Finance Bill.
The reduction in excise duty on sports-betting stakes from 15% to 5% is a significant relief for bettors, as they will now pay Sh5 in tax per every Sh100 wagered. The taxation point has shifted from the moment a bet is placed to when funds are transferred from a mobile money wallet into a sports-betting operator’s account, leveraging Kenya’s tightly regulated mobile money infrastructure to improve tax enforcement.