What you need to know:
- All betting firms seeking to renew their licenses and new entrants also have to adhere to the new regulations by the taxman.
- This further burdens the betting companies as there already exists a 15 percent betting tax and 30 percent corporation tax.
The Kenya Revenue Authority (KRA) has ordered gaming companies to start submitting the revenue collected from the 20 percent excise tax deducted from stakes placed by punters.
The Finance Act 2019 introduced excise tax on stakes placed on bookmakers by punters. KRA has also ordered the gaming companies to display the same deductions on betting slips.
"All stakes placed on bookmakers shall attract excise duty at the rate of 20% which shall be charged at the time of staking and remitted to the Commissioner of Domestic Taxes on or before the 20th day of the following month," partly reads a letter from the taxman to gaming companies
Most gaming companies are yet to implement this, but KRA has now threatened to take action.
"We, therefore, request that you charge excise tax on all stakes and display the same in your bet slip. We thank you for your continued compliance and wish to register our appreciation for the great partnership that has seen tremendous growth in revenue generated from the industry. However, we wish to inform you that non-compliance of the new amendments will attract tax recovery measures as provided for in the Tax Procedures Act," the letter adds
KRA has now written to individual gaming companies to submit the excise tax that they should ideally have deducted from the 7th of this month to the 20th.
KRA also imposed a 20 percent withholding tax on all winnings on compliant betting firms from July this year.
All betting firms seeking to renew their licenses and new entrants also have to adhere to the new regulations by the taxman.
This further burdens the betting companies as there already exists a 15 percent betting tax and 30 percent corporation tax.