Tanzania joins Kenya, Uganda tax squeeze on gamblers’ winnings

Tanzania has this month introduced a gaming tax on the amount or value of winnings through casinos and sports betting, tightening the noose on gamblers already squeezed by levies in neighbouring Kenya and Uganda.

In changes to its Gaming Act, Tanzania said levies of 12 percent and 10 percent are now applicable on the amount or value of all winnings in casinos and sports betting, respectively—joining its East Africa Community partners Kenya and Uganda, which have both already gone hard on gamblers with punitive taxes to discourage the addictive habit.

“The licensee of gaming activity is required to withhold gaming tax on winnings made and paid for. In this case, the licensee is the withholding agent who is required to remit the tax withheld on or before the seventh day of the month following the month of payment of the winnings; and submit a return or certificate of payment of tax withheld within 15 days after the end of each calendar month,” Tanzania’s Finance Act 2022 reads.

Until this month, Tanzania only focused on the taxation of revenue of betting firms through levies that ranged between 12 and 25 per cent. Its latest tax move means it is going after individual gamblers, hoping to discourage them through painful levies and also draw some revenue from the willing die-hard gamers.

In Kenya, gamblers already pay a 20 per cent tax on winnings that betting firms are required to withhold and remit to the Kenya Revenue Authority (KRA). This means that if for example one wins Sh1,000, he or she will receive Sh800 as the KRA takes Sh200. The levy on winnings by individuals is in addition to corporate income taxes levied on the gambling and gaming business.

In Uganda, the tax on the value of gaming winnings has been set at 15 per cent and withheld by gaming firms for subsequent remission to the revenue authorities.

In Kenya, the government has sought to tighten the noose on gamblers with the State earlier this year even attempting to further raise the tax on betting stakes to 20 per cent.

In a proposal shot down by MPs, Treasury Cabinet Secretary Ukur Yatani had targeted heavier taxes on punters by raising the excise duty on cash wagered on betting, gaming, a prize competition, and buying a lottery ticket from the current 7.5 per cent.

In his unsuccessful submission, Mr Yatani said gambling and gaming had become “extremely addictive and can result in a variety of harmful repercussions, especially to the youth”.

A survey late last year showed that elderly Kenyans aged 55 and above topped the list of weekly gamblers in Kenya.

SOURCE: THE EAST AFRICAN