Kenya is planning to put player withdrawals under a new tax structure for FY25/26, but not without some reservations from the country’s budgetary watchdog.
The Parliamentary Budget Office published an overview of the approved budget for the next financial year, which envisions increased gambling taxation to boost the Treasury’s coffers.
In particular, a change within the Finance Act 2025 will build on a previous provision under the Income Tax Act. The provision of this latter Act imposed a 20% tax on all net positive player winnings from betting, gaming, lotteries, and similar cash competitions – meaning the amount of the original stake was left untouched.
In particular, a change within the Finance Act 2025 will build on a previous provision under the Income Tax Act, which until now imposed a 20% tax on all net positive player winnings from betting, gaming, lotteries, and similar cash competitions – meaning the amount of the original stake was left untouched.
Going into the next fiscal year, the Finance Act 2025 will reduce that tax to 5% but instead make it a blanket levy, meaning that every withdrawal will be charged regardless whether it brings net profits or not.
Affecting both residents and non-residents of Kenya, the policy revision aims to increase annual tax revenues from Ksh 5.4bn (£32.9m) to Ksh 11.4bn (£69.54m).
But the Budget Office itself has expressed concerns that there might be unintended consequences for Kenya’s gambling market – mainly a push of players to the black market and therefore a completely opposite result to the planned increase in revenues.
“If a player has deposited funds but decides to withdraw them without placing any bets, they could still face a 5% tax on that withdrawal, despite not earning any income,” the government body noted.
“The new tax proposal has the risk of driving players away from formal betting platforms, as many casual and small-scale bettors might be discouraged by the prospect of losing part of their initial deposits even without making a profit.”
While not outright advising against the new tax due to its “potential to significantly raise government revenue”, Kenya’s Budget Office has recommended to keep a close watch on developing trends, mainly whether player accounts are dwindling and if tax revenue is growing as projected.
The new withholding tax will sit alongside Kenya’s excise duty on bets, which has also been changed. The duty used to be paid when customers placed a bet, but the government is now taking this to an earlier step – customers will now pay it when transferring money from mobile wallets to a gambling account.
It has, however, opted to reduce the excise duty to 5%. This may have been motivated by a desire to keep Kenyan bettors engaged with the sector, as it is clear that even elements of the government are concerned about the impact the changes in income tax may have on this.
The changes come at a wider critical time for Kenya’s betting industry, with the country’s gaming regulator, the Betting Control and Licensing Board (BCLB) due to be replaced by the Gambling Regulatory Authority of Kenya (GRA) in 2026.
Despite tax changes being recurrent, the country remains one of Africa’s largest and most widely targeted markets for international betting companies. Most recently crypto sportsbook and casino platform BC.Game set up shop in Kenya, securing a local licence.
Kenya is planning to put player withdrawals under a new tax structure for FY25/26, but not without some reservations from the country’s budgetary watchdog. The Parliamentary Budget Office published an overview of the approved budget for the next financial year, which envisions increased gambling taxation to boost the Treasury’s coffers. In particular, a change within …