This is proposed under the latest Draft Medium-term Debt Strategy for the periods 2024/25 and 2026/27.
Treasury says that the move is aimed at increasing remittance compliance by firms.
“Betting and gaming activities have negative social impacts to the society particularly among the youth thus the need to discourage participation in the activities through imposition of excise duty. Taxation of this sector is characterized by low compliance,” Treasury says in the draft proposal.
“To increase compliance in the remittance of 28 excise tax on betting services and withholding tax on gaming, it is crucial to have a real time transmission of revenue and data required for enforcement of compliance,” it adds.
In October 2022, KRA began onboarding punters into KRA’s platform with the goal of collecting 7.5 percent excise duty on bets and 20 percent withholding tax on wins daily.
The onboarding improved collections after KRA raised Sh8.7 billion in taxes as of June 7, 2023.
Tax at source is a new, global trend that allows government administrations to collect taxes directly from taxpayers instead of using the self-assessment system that has been in place for years.
The betting industry is also looking at tax hikes as the state seeks to review excise duty on betting to address the negative externalities.
