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Gaming operators in Kenya have not had a good year in 2018 as the government has made things difficult for them in a number of ways. Kenya’s gambling industry is currently very unhappy with the 35 percent tax rate that was put into effect this from January 1st and industry representatives say that the new tax regime is taking a severe toll on stakeholders.
The Kenya Film Classification Board (KFCB) has put forward a proposal to impose a gambling advertisement ban from 5 am to 10 pm. The idea behind the ban is to protect minors from being exposed to gambling ads. This new proposal on advertising regulations has not gone down well with betting operators who feel they are being subject to far too many regulations.
Lawmakers in Kenya might bend to pressure and reduce the 35 percent tax that currently applies to betting and gaming. The Star reported that the Kenyan government is debating amendments to the Betting, Lotteries, and Gaming Act and that a lower tax rate could be implemented if it gets support in parliament. It is expected that the tax rate will drop down to 15 percent.
The hefty tax rate was imposed on gambling and betting providers in Kenya was done when Finance Bill 2017 was passed and signed into law by President Uhuru Kenyatta. The steep tax rate, which has been in effect since January 1st, 2018, has created a lot of protest from companies that are affected. On top of the 35 percent tax on their betting revenues, Kenya’s licensed operators are also subject to a 30 percent corporate tax and they must also give 25 percent of their total sales to fund social programs which include sponsorships for sports. Legislators discussed on Monday, the possibility of cutting the social program share to 5 percent is being discussed as part of Financial Bill 2018.
Proposed Tax Rate Will Be Across All Services
When the 35 percent tax rate came into effect in January, Kenya became the most expensive country in Africa to run a gambling operation in. Prior to that, tax rates varied depending on the kind of gambling service offered. Companies that ran lotteries were taxed at a rate of 5 percent while a 7.5 percent rate was applied to sports betting revenue. The tax rate for casinos was set at 12 percent. If the tax rate is changed then all gambling services will be subject to the 15 percent tax rate.
