TLDR
- Kenya’s Finance Bill 2026 proposes a 20% withholding tax on gambling winnings for both residents and non-residents
- The bill also includes a 5% tax on deposits and withdrawals from gambling accounts
- The definition of deposits has been broadened to include chips, tokens, credits, and similar instruments
- Public participation on the bill opened May 11 and closed May 25, with the bill tabled in Parliament on April 30
- Critics warn heavier taxes could push bettors toward offshore or unregulated platforms
Kenya is moving forward with plans to impose a 20% withholding tax on gambling winnings as part of its Finance Bill 2026. The bill was tabled in Parliament on April 30 and entered a public participation phase on May 11.
The public submission window closed on May 25. If the bill passes, it would mark a major shift in how Kenya taxes its betting industry.
Finance Bill 2026 Reverses Last Year’s Tax Approach
The proposed 20% tax on winnings would apply to both residents and non-residents. This comes just a year after Kenya revised its gambling tax framework to focus on a 5% levy on deposits and withdrawals.
Legal analysts at Cliffe Dekker Hofmeyr said the proposal represents a return to an earlier tax position that existed before the 2025 reforms. The firm noted the bill introduces “a 20 per cent withholding tax rate on winnings.”
Under the new framework, withdrawals would still face a 5% tax. Winnings would be taxed separately at the 20% rate.
The bill also broadens the definition of deposits. It now includes chips, tokens, credits, or similar instruments used in gambling activities.
Winnings are defined in the bill as payouts from licensed betting, gaming, lottery, or prize competition operators. The original stake is excluded from this definition.
Withdrawals are described as any money or cash equivalent taken from gambling accounts. These definitions are designed to close loopholes in existing law.
The goal is to ensure all transactions tied to betting fall under the tax net. The changes are part of amendments to the Third Schedule of the Income Tax Act.
Kenya Remains One of Africa’s Largest Betting Markets
The tax proposals sit within a broader government effort to expand revenue and tighten regulation of digital transactions. Kenya remains one of the largest betting markets on the African continent.
Mobile platforms like M-Pesa have fueled rapid growth in sports betting and online gaming across the country. The accessibility of mobile money has made it easy for millions of Kenyans to place bets.
The government’s push also extends to virtual assets and digital payments. The Finance Bill 2026 goes beyond gambling taxes to address oversight of these areas as well.
Reaction to the proposed measures has been mixed. Supporters say higher taxes and stricter oversight could boost state revenue and improve accountability in the industry.
Critics have raised concerns that heavier taxation could backfire. They warn it may drive players toward offshore or unregulated betting sites.
If that happens, it could undermine the very oversight the government is trying to enforce. The balance between revenue collection and market regulation remains a challenge.
The bill is now moving through the parliamentary process. Lawmakers will review public submissions before deciding on the final version of the legislation.
Kenya’s gambling industry has been a frequent target of tax policy changes in recent years. The public comment period for the Finance Bill 2026 closed on May 25, and Parliament will now consider the next steps.
