NAIROBI, Kenya, May 27-The Gambling Regulatory Authority is seeking far-reaching changes to Kenya’s gambling tax regime, including the scrapping of the legal definition of “winnings” and the removal of the 20% withholding tax on prize competitions, arguing that current provisions are impractical and difficult to enforce.
In its presentation to the National Assembly Departmental Committee on Finance and National Planning during stakeholder consultations on the Finance Bill (National Assembly Bills No. 26 of 2026), the Authority proposed the expunging of Section 2(e), which defines gambling “winnings” as payouts from licensed operators, excluding stakes or wagers.
It further wants Section 10(d)(ii) amended to delete the 20% withholding tax on winnings from prize competitions and short-term lotteries, saying such contests are largely promotional in nature and do not involve direct wagering.
The regulator also flagged concerns over the current definition of “amounts deposited,” which it says is overly complex and should be simplified to refer strictly to cash deposits made into a punter’s wallet, regardless of source.
Under the current framework, deposits include money or money’s worth transferred, credited, or converted into chips, tokens, credits, or similar instruments — a structure the Authority argues creates valuation challenges, particularly where bonuses and promotional credits are involved.
“The current taxation framework on winnings and prize competitions is impractical to implement effectively within both digital and physical gambling environments,” the Authority noted in its submission.
“We are dealing with an industry where value is often promotional, virtual, or non-cash in nature, making enforcement of withholding tax on ‘winnings’ highly complex and inefficient.”
Despite pushing for simplification and removals in certain tax areas, the Authority pointed to rising revenues as evidence that the existing system remains broadly effective when clearly structured.
Data presented to the committee shows that gambling tax collections rose from Sh 25.24 billion in the 2024/2025 financial year to Sh 28.45 billion in 2025/2026 as of April, representing an 11 per cent increase, according to Kenya Revenue Authority figures.
The regulator attributed the growth to a clearer tax framework, particularly the introduction of taxes on deposits and withdrawals, which it said has significantly broadened the tax base.
National Assembly.
