Gambling regulator pushes to scrap winnings tax in Finance Bill 2026 submissions

Kenya’s Gambling Regulatory Authority (GRA) has proposed sweeping changes to the country’s gambling tax framework, including the removal of the legal definition of “winnings” and scrapping the proposed 20 per cent withholding tax on prize competitions, saying current provisions are impractical and difficult to enforce.

Appearing before the National Assembly Departmental Committee on Finance and National Planning during consultations on the Finance Bill 2026, GRA Director General Peter Kirimi urged lawmakers to delete Section 2(e), which defines gambling winnings as payouts from licensed operators, excluding stakes or wagers.

The proposal seeks to reverse parts of the Finance Bill 2026, which aims to reintroduce a withholding tax on winnings from prize competitions and short-term lotteries.

The move would roll back reforms introduced in 2025 that shifted taxation toward deposits and withdrawals.

Karimi told MPs that prize competitions function mainly as marketing promotions rather than gambling activities involving stakes. He argued that taxing non-cash rewards such as electronics, household items, spa services, or car servicing would be impractical.

“The current taxation framework on winnings and prize competitions is impractical to implement effectively within both digital and physical gambling environments,” the Authority said in its submission.

It further recommended scrapping Section 10(d)(ii), which provides for the 20 per cent withholding tax, arguing that such promotions do not involve direct wagering and therefore should not be treated as taxable winnings.

The regulator also raised concerns over the definition of “amounts deposited,” saying it is overly complex and should be simplified to cover only cash deposits made into a player’s wallet, regardless of source.

Kirimi noted that current rules include chips, tokens, credits, and promotional bonuses, which it said create valuation and enforcement challenges.

Instead, the Authority proposed a simpler model focusing strictly on cash deposits, arguing that this would make the tax regime more predictable and easier to administer across both digital and physical platforms.

Despite its push for simplification, the GRA pointed to rising revenues as evidence that the current system is functioning effectively.

Data presented to the committee shows gambling tax collections rose from Sh25.24 billion in 2024/2025 to Sh28.45 billion in 2025/2026 as of April, an 11 per cent increase, according to Kenya Revenue Authority figures.

GRA attributed the growth to earlier reforms that broadened the tax base through levies on deposits and withdrawals. The Finance Bill 2026 is currently under parliamentary review following the closure of public submissions