KRA collects KES5.8Bn excise and withholding tax on Betting

The Kenya Revenue Authority(KRA) has collected Sh5.8billion of excise and withholding tax on daily betting winnings since November 2022 when the taxman integrated its system into that of betting firms and started collecting taxes on a daily basis.

The taxman introduced the daily collection of the 7.5 percent excise duty on stakes and the 20 percent withholding tax on winnings from these 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, who have been integrated onto the KRA online platform, iTax.In the year ended June 2022, before technology integration, the taxman collected Sh5.7 billion in Withholding Tax (WHT) from winning bets.

This means that the integration is expected to double the collections as the taxman now has visibility of real-time betting transactions.

Speaking during a sensitization forum on the betting tax integration, KRA Chief Manager Domestic taxes Miriam Sila said the taxman 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.

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.

In September last year, President William Ruto urged regulatory authorities to reign in on online betting companies which he said were operating in an opaque space.

“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.

Kenya Revenue Authority (KRA) statistics indicate that overall collections in the sector since June 2022 stand at Sh15.8billion, against a target of Sh24billion for the 2022/23 financial year.