President Uhuru Kenyatta has accepted a reduced 7.5 percent gaming turnover tax, giving the Kenyan online gambling business a new lease of life. Previously, Kenya’s gaming turnover tax was a whopping 20%, making things difficult for Kenyan gambling companies. Kenyan gaming firms were taken aback when Kenyan legislators imposed a whopping 20% gambling turnover tax in 2018. Gambling companies sought that the Kenyan Revenue Authority explain its decision and describe why the gambling turnover tax was increased from 10% to 20% without reason.
Uhuru directed Ukur Yatani Kanacho, the Kenya Treasury Secretary, to conduct a review of the 20% tax rate for gaming businesses before modifying the budget for the following fiscal year. Following the conclusion of the study, the former ambassador advised that the Kenyan government remove the contentious gaming turnover tax and amend the Finance Bill 2021. His suggestion was that gambling businesses in Kenya be required to pay a lesser turnover tax of 7.5 percent.
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Despite his advice, the President’s hostility to both land-based and online gambling activities made it unclear whether he would sign the new legislation. Needless to say, as that unwelcoming pattern continued, the Kenya gambling business suffered greatly. Several major gaming companies, notably SportPesa, have also decided to exit the sector.
The Kenya gambling sector has been revived as a result of the President’s decision to accept the amended 7.5 percent turnover tax on gaming. His move to dramatically decrease gambling tax rates will make the Kenyan gambling business more friendly to large operators, such as SportPesa, which will most likely return.
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Other international gambling companies in the business, including as Betsson, which recently teamed with Bet High Kenya to launch its Betsafe brand, have praised the President’s decision. Starting July 1st, a revised, more welcoming 7.5 percent gaming turnover tax would apply to all turnover received by gambling companies in Kenya. Players will gain from the reduced gaming turnover tax since they will receive the great majority of their earnings.
Kenya tax 7.5% Kenya tax 7.5%
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer