Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Finance

Betting, lotteries and gaming companies could pay up to 70pc tax

Currently, betting companies pay 7.5 percent of their gaming total revenue, gaming companies, 12 percent of the revenue, lotteries, 5 percent of their total turnover and prize competitions, 15 percent of their gross turnover/FILE

NAIROBI, Kenya, Mar 31 – Betting and gaming companies are likely to pay close to 70 percent in taxes if proposals contained in the budget to slap an increase of tax to 50 percent is implemented.

Tax Partner at PwC Steve Okello has termed the move as harsh to the nascent industry likely to adversely impact on the growth.

This is because apart from the gaming taxes made by these company, there is an extra 30 percent corporation tax on net income.

“I feel that the change is unfair because it’s in a way discriminatory, you know one industry is being picked out and heavily charged, while other industries are paying relatively lower taxes. Morally someone may try to question the sector, but the question one would ask is why this extreme discriminatory treatment,” Okello said on Friday during the post-budget briefing.

Currently, betting companies pay 7.5 percent of their gaming total revenue, gaming companies, 12 percent of the revenue, lotteries, 5 percent of their total turnover and prize competitions, 15 percent of their gross turnover.

All these now will be subjected to a uniform tax of 50 percent plus a corporation tax of 30 percent of net income.

In addition, Okello argues that since winners are not being taxed, the proposal will do little to curtail gambling habits.

“The way the tax is structured is that it is paid by the company, not you. Even if you get any winning, the jackpots you see every day on newspapers and TV, you are not paying anything. So if the gambler is not being impacted he will continue gambling. The proposed impact the CS was trying to achieve might not necessarily happen,” Okello explained.

Senior Tax Partner Rajesh Shah added that the move will may also affect the amounts of jackpot set by companies adding that it may be hard for them to sustain high winnings as they try to absorb the shock.

“If the tax on alcohol is too high, people then go and drink things which are not hygienic. So the danger here could be that if people want to gamble, they might gamble in a way that is not good for them or the country, “ Shah noted.

Advertisement. Scroll to continue reading.

He is however optimistic that there will be an amicable solution for win- win situation before passing of the Finance Act which allows the implementation of the set policies as well as the budget.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...