Uganda Scrabs 15% Withholding Tax(WHT) on Casino Winnings
Uganda has recently made a significant move by removing the 15% withholding tax (WHT) on casino winnings, effective from 01 July 2023. This decision has been taken by the Ugandan government as a part of its broader strategy to promote the gaming industry and attract more foreign investments.
The Third Schedule of the Income Tax Act of Uganda provides a detailed outline of the withholding tax structure in the country. Under the current rules, winnings from sports betting attract a 15% withholding tax. The tax is withheld by the individual/casino or betting company, depending on the type of gambling.
“It was a challenge to apply the tax the way the authority desired as each game would have to be stopped at every round to administer withholding tax for each player who won yet some of the games like slot machines ran up to 20 spins per minute with each spin constituting a separate bet. Further, wins from games are usually wagered over and over again and clients wanted to have lost wagers offset on a wager won prior to being taxed yet the law does not cover that. Section 118C did not define at what point a winning should be determined which raised questions of whether it was at every game or at the end of the day when the punter wanted a cash out. The purpose of this amendment is therefore to ease administration by removing the withholding tax under Section 118C of the Income Tax Act from gaming in the Casinos and instead increasing the tax rate on gaming from 20% to 30% under the Lotteries and Gaming Act.” Read Part of the proposed bill amendment.
The move attracted various reactions from the business and gambling community in Uganda with most of those who commented supporting the decision.
“With the fast-growing gaming and sports betting industry in the region, why not consider investing in Uganda now? Trust the process but most importantly, be part of the process.” Reacted one of the players in the industry after coming across the news.
The decision to scrap the WHT on casino winnings is part of the Ugandan government’s policy of providing incentives to the gambling industry, which is critical to the nation’s economic development by contributing a good sum to the national budget. The casino industry plays a crucial role in this regard by attracting high value punters and providing them with a source of entertainment that meets international standards.
The removal of the WHT on casino winnings will allow the industry to grow and attract more investments. It will also create more employment opportunities and generate additional revenue for the Ugandan government as tourism attracts foreign currency. The decision will undoubtedly have a positive impact on the country’s economic growth and development, while further showcasing Uganda as a preferred destination for punters seeking world-class gambling and entertainment facilities.
