Tuesday, November 29,2011 : MORE TAXES FOR KENYAN PUNTERS
Players could face a 20 percent withholding tax on their winnings
The Kenyan government appears to be moving toward an increase in taxation on gamblers, proposing the introduction of a 20 percent withholding tax on players' winnings, reports the Daily Nation.
It is not at present known how the proposed tax would impact Montreal-based Amaya Gaming, which earlier this year launched Kenya's first online betting site at Bet Kenya.com as the centrepiece of Amaya’s agreement with the Betting Control and Licensing Board of Kenya (BCLB) to operate online gaming in the country (see previous InfoPowa report).
News of the new tax surfaced at a business conference in Nairobi, where senior government official David Gichohi noted that there was no way that winning gamblers can be taking 100 percent of the money without paying taxes.
He said that the government plans to impose the 20 percent withholding tax on winnings next year in an effort to bring more people into the tax net.
Tax planning by the government has for the past decade been focused on finding areas where people accrue wealth but are as yet untaxed, the Daily Nation reports.
The government currently levies a 16 percent tax on gaming companies, leaving the players unscathed.
The mainly land casino industry in the country is less than enthusiastic about the new tax, complaining that it already carries a heavy tax burden and that it could discourage players.
Casino manager Fridah Mwebia said: “Our members will meet in December to discuss what steps we are going to take against this move.”
The Association of Gaming operators-Kenya (AGOK) said its members are opposed to the new tax and have presented their view to the parliamentary budget committee that it is unfair and impractical.
“If they (government) want [to do this], they should levy the 20 percent tax directly on the winning customers. If it is directed to the casinos, it is impractical,” a spokesman for the Babylon Casino in Nairobi said, noting that the casinos have no problem paying taxes, but it was a question of how workable the tax system was.
This is the government's second attempt to increase tax on gambling; a previous initiative tried to introduce a five percent excise duty but failed after the casinos took the matter to court and won.
The conference was about the need for firms to embrace e-commerce in marketing their products and services to take advantage of the over 12 million Kenyan internet users.
The South African government has also introduced new gambling targeted tax initiatives, requiring all winnings over Rands 25,000 to be declared for tax purposes.