Kenya Records 30% Revenue Growth from Interlinking Betting Firms to the Revenue Authority’s System

Kenya Revenue Authority (KRA) has successfully integrated the three batches of betting companies (36 companies) to real time remittance of Excise Duty and Withholding Tax on Winnings and data transmission. Integration of the last batch comprising of eighty seven (87) companies is currently under implementation.

The integration is in line with KRA's commitment to streamline tax remittance from the sector, to scale up revenue mobilisation and collection. The integration is KRA’s initiative to collect tax at the source. Through the tax at source program, KRA is implementing reforms to move towards seamless taxation by ensuring that its systems and businesses are integrated in a way, which allows data to be transmitted automatically through machine-to-machine based processes, including in real-time where appropriate.

The process of integrating betting companies into the KRA system began in mid-October 2022, targeting the daily collection of the 7.5% Excise Duty on stakes and the 20% Withholding Tax on winnings from the companies. The initiative has significantly enhanced revenue collection in the sector, with the collection of Excise Duty and Withholding Tax on winnings recording a 30% growth in revenue collection (KShs 8.7 billion) as of 7th June 2023 when compared to the same period between November 2021 and June, 2022.

The integration has enabled KRA to make significant improvements on tax administrative processes in the betting and gaming sector, with daily data visibility providing trends that inform compliance measures. Additionally, the integration has made betting and gaming transaction data readily available, which facilitates verification of daily remittances by taxpayers. It is envisaged that the data integration will continue to yield more revenue upon verification of the transmitted data.

KRA is working jointly with other stakeholders including Kenya’s Betting Control and Licensing Board (BCLB) and Safaricom PLC (a listed Kenyan mobile network operator) in the integration process. KRA’s strategic direction is to enhance government revenue mobilisation by facilitating economic growth and trade by ensuring compliance with tax and customs laws.

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By: Loice Akello, International Relations & Diplomacy Division (M&C)