The Kenya Revenue Authority(KRA) has collected Kes5.8 billion of excise and withholding tax on daily betting winnings since November last year when the taxman integrated its system into that of betting firms and started collecting taxes on a daily basis.
The Authority introduced the daily collection of the 7.5 per cent excise duty on stakes and the 20 per cent withholding tax on winnings from betting companies to allow real-time computation of taxes and increase revenue collection.
The amount has been collected from 16 betting companies, accounting for 90 per cent of the sector, integrated into the KRA online platform, iTax.
Before technology integration, the taxman collected Kes5.7 billion in Withholding Tax (WHT) from winning bets in the year ended June 2022.
Further, the integration is expected to double the collections as the taxman now has visibility of real-time betting transactions.
KRA Chief Manager Domestic taxes Miriam Sila said the Authority is working towards integrating all betting companies to grow revenue collection in the sector.
“We are working on the third phase to integrate 20 more companies in our platforms to grow our collections, once this is done, we will have 96 per cent of the companies remitting excise and withholding tax on winnings daily,” she said.
Speaking during a sensitization forum on the betting tax integration Miriam noted that automation has played a big role in netting extra revenue from the sector, as the main challenges were the visibility of real-time betting transactions and the unavailability of betting and gaming transactions data.
“In the period before the automation, the transactions we could track stood at almost 50-60 per cent, we are now ant 90 per cent and hope to get to 100 per cent,” she said.
President William Ruto urged regulatory authorities to reign in on online betting companies which he said were operating in an opaque space in September last year.
“That space needs much clarity and I am happy that the Central Bank of Kenya is taking steps to bring the actors in the online betting space to regulations so we can make them much more accountable,” Ruto said.
