Kenya Revenue Authority boosts betting revenue by 30% through tax system integration

Revenue collection in Kenya's betting and gaming sector has surged, with the Kenya Revenue Authority (KRA) reporting over KShs 15.1 billion collected from excise duties and withholding taxes on winnings. This marks a notable 23.9% increase compared to the previous financial year 2021/2022.

The excise duty on betting has seen remarkable growth, achieving a 116.2% increase with KShs 6.64 billion collected, surpassing the target of KShs 5.715 billion by KShs 925 million. This reflects a 30% rise from the same period last year. 

Additionally, withholding tax from winnings contributed KShs 8.601 billion, a 21.1% increase, while the overall betting tax grew by 14.7%, totaling KShs 3.874 billion.

This revenue boost is largely attributed to the KRA's integration of betting companies into its tax system, with 36 firms already connected and an additional 87 firms currently undergoing integration. This initiative, which began in mid-October 2022, aims to streamline tax remittances, targeting daily collections of a 7.5% excise duty on stakes and a 20% withholding tax on winnings.

The integration has enhanced KRA's ability to monitor tax compliance in real-time, providing daily visibility into betting transactions and enabling more efficient verification of tax remittances. This approach is part of a broader global trend towards tax-at-source systems, which facilitate immediate tax collection at the point of income generation.

KRA's efforts also include the implementation of the Electronic Tax Invoice Management System (eTIMS), which has reduced VAT fraud and improved tax revenue. So far, 95,732 VAT-registered taxpayers have been onboarded, leading to significant revenue remittances. 

With these reforms, KRA anticipates further improvements in revenue collection as more firms adopt these systems.