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Kenya Government To Implement Gambling Levies

The Kenya government has been given the all-clear to enforce a levy on all casino winnings, following the hearing of a case brought to overturn the law. The new law was enacted in January; however the Kenya Revenue Authority (KRA) was prevented from implementing the law until the case had been heard.

Forty two casino operators filed the petition arguing that the law would harm the gambling business and the tourism industry in Africa. The law calls for a 20 percent taxation on all casino winnings.

Judge Finds Law is Not Unconstitutional

The case was heard by High Court Judge David Majanja who dismissed the case against the new gambling levy in Kenya. The judge stated that the law is not considered unconstitutional due to lack of public participation as the memorandum forwarded by gamblers is evidence of their participation.

Judge Majanja also stated that there is no real dispute between the parties at this time and he will not inquire as to the practicality of the implication as this would be tantamount to an advisory opinion.

He went on to say that if a dispute were to arise in the future with regards to the collection of the taxes, it could be resolved through the Income Tax Act which is able to "interpret the law in light of the facts at hand."

Disputing the Law

The dispute against the law arose when forty two operators brought a case claiming that before the law was passed, they were not consulted as stakeholders in the gaming industry. They also argued as to the effect the law would have on the gambling and tourism industries.

The Finance Act 2013, Act No 30 of 2022 stated that winnings from betting and gaming would be subject to a 20 percent tax. The law was implemented in January 2014 and operators were required to submit the taxes directly to the KRA. However, following the submission of the petition, Judge Majanja issued a ruling that the KRA would not be able to collect any taxes until the case had been heard.

With the case heard and dismissed at the end of February, the KRA will now be able to collect the taxes according to the amendment in the law. According to a PwC audit, it is expected that through this law, the Kenyan government will collect Sh432 million ($5 million) in taxes each year.