Parliamentarians Propose a Fixed Gross Gaming Revenue Taxation Rate in Kenya
The Gambling Control Bill 2023 is currently being deliberated in Kenya’s parliament by members of the national assembly. Throughout these discussions, numerous suggestions have been put forth before presenting the final report to the president for his consent. Among these recommendations is the implementation of a fixed rate for determining the gross gaming revenue within the highly regulated industry.
During the proceedings in the parliament chambers, members discussed the recommended policies formulated by the National Assembly Sports and Culture Committee. These policies were open for discussion during the Second Reading in Parliament, and we will explore some of them as well as the reactions of certain members.
House Majority Leader Kimani Ichungwa authorized the advancement of the bill to the Second Reading while restating its objective, which entails the regulation of the gambling sector. Additionally, he expressed gratitude towards the Sports Committee for their exceptional commitment to this bill, as their efforts facilitated the creation of certain policies that will be deliberated upon in the House.
The committee had proposed a gambling tax of 15% on gross gaming revenue to be reduced to 13% and the removal of the gaming tax that was to be charged at a rate of one percent of the same revenue, however, the majority leader disagreed with this proposal. “Gambling, like smoking and partaking of alcohol, is considered sin tax, and you cannot reduce sin tax under the pretext of wanting to increase government revenue.
“We are having this new legislation to be able to control this menace of gambling, and I want to persuade the Sports Committee that they cannot be reducing taxation at a time when we are looking at this opportunity with the Lottery Bill to be able to tap into the resources they are putting into gambling.
“I would propose that we move that gambling revenue tax to a level of about 25% so that we can collect more revenue for good causes like the rehabilitation of people addicted to gambling,” said Hon. Kimani Ichungwa, Majority Leader of the National Assembly
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He added on the adverse effects of gambling addiction on the community and the positive perception created by the media about gambling; thus, with the passage of the bill, the media will also be regulated on the content it broadcasts to viewers regarding gambling.
“Gambling Control Bill 2023 is here to replace the outstanding Betting, Lottery, and Gaming Act of 1960 to institute a comprehensive legislative framework for the regulation of gambling in Kenya with specific emphasis on incorporating self-gambling principles in the sector.
“Additionally, the bill seeks to establish the Gambling Regulatory Authority, which shall bear the responsibility of regulating the gambling sector.” Hon. Wako Naomi Jillio, Member Sports and Culture Committee, added.
She acknowledged that gambling is a shared function between the national government and the county, and all the policies made are of mutual benefit to both levels of government.
Furthermore, a proposal has been introduced to create a single gross gaming rate across the betting and gaming sectors. This means the current excise, withholding tax, corporation tax, and VAT applications on betting and gaming will be consolidated into one.
“The betting sector remains very critical in terms of revenue in this country to move forward and make sure we rely on our resources rather than going to borrow outside. However, there is a need to relook at some of these particular taxes and how they are administered and see how we can reduce the cost of administration while effectively raising more revenue.
“The committee was attempting to propose that there be a gross gaming revenue where we have one flat rate for this gaming sector, so that would consequently leave more money with the punters, making sure the chances of winning have increased, and an increase in tax revenue because now we have a simplified tax process. Also, making sure the cost of administering those taxes for the players is reduced,” stated Hon Kuria Kimani, Chair National Finance and Planning Committee
He further advised that as much as the bill will try to uproot the menace associated with gambling, we should also look into the context in which gambling generates revenue for the government, which can be used for good causes, especially the growth of the sports sector.
Other members of parliament expressed their views on the bill and had assurances of its passage in the House.
