Regulatory wins in Kenya: new tax laws reshape gaming
The latest communication from the Kenya Revenue Authority (KRA) sets a collaborative tone for upcoming tax changes. Darnel Kagira, Chief Manager at the Kenya Revenue Authority, wrote, “I take this opportunity to appreciate your support in our objective to enhance tax compliance in the Betting & Gaming Sector in the financial year 2025/26. You are encouraged to continue with the same spirit of voluntary compliance.” The message positions goodwill as a foundation for implementing the fresh tax structure introduced under the Finance Act 2025.
Excise duty shift: from wagers to deposits
Starting 1 July 2025, excise duty on betting and gaming moved from 15% of the amount wagered or staked to 5% of the amount deposited into a customer’s wallet. The statute defines the taxable base precisely, “the amount deposited into a customer’s betting wallet means the amount of money transferred by a customer into the customer wallet maintained by a licensed betting and gaming operator for betting and gaming purposes.” By taxing deposits rather than every stake, authorities intend to simplify calculations for operators and reduce the administrative load that accompanies transaction-by-transaction levies.
Withholding tax revision eases players’ burden
An equally significant amendment has been implemented with the withholding tax. Effective the same date, the rate will drop from 20% in respect of net winnings to 5% in respect of withdrawals made by players. The law clarifies that “withdrawals means the amount of money withdrawn by a customer from their betting or gaming wallet maintained by a person licensed under the Betting, Lotteries and Gaming Act.” Moving the tax trigger from each winning ticket to the moment money exits a gaming wallet aligns collection with tangible cash movement, potentially smoothing cash-flow management for both players and platforms.
What this means for operators and players
Regulators frame the adjustments as regulatory wins that balance revenue objectives with a more straightforward compliance framework. Operators will shift from tracking numerous wagers to monitoring wallet inflows, a change expected to streamline reporting systems and reduce the potential for disputes. Players, meanwhile, encounter a noticeably lower tax rate when withdrawing funds, which could enhance the sector’s overall appeal without compromising government collections. The uniform effective date of 1 July 2025 allows all stakeholders a single timeline for system upgrades, client notifications, and staff training.
Merry July for the Kenyan betting industry
Kenya Revenue Authority’s appreciative tone suggests that voluntary compliance will remain the preferred enforcement model. By acknowledging industry cooperation and clarifying each new taxable touchpoint, such as deposits for Excise Duty and withdrawals for Withholding Tax, the authority lays out an implementation roadmap that minimizes uncertainty. As operators recalibrate internal processes and players adapt to the revised taxes, Kenya’s gaming industry moves toward a regulatory designed to be simpler, fairer, and more efficient for all parties involved.
