TLDR
- Kenya’s Gambling Regulatory Authority (GRA) has urged Parliament to drop a proposed 20% tax on gambling winnings from Finance Bill 2026
- The regulator says taxing non-cash prizes like electronics or spa treatments would be unenforceable
- GRA wants taxation limited to cash deposits only, calling it “simple, stable and predictable”
- Tax collections already rose 11% to Ksh28.45 billion (~$220m) by April 2026 under the current deposit-based system
- The Finance Bill 2026 is still under parliamentary review following public submissions that closed May 25
Kenya’s gambling regulator is pushing back against a government plan to bring back a 20% tax on gambling winnings, saying the proposal is too hard to enforce and could cause problems for the industry.
The tax is included in Finance Bill 2026. It would bring back a withholding tax on winnings from prize competitions and short-term lotteries. This would reverse changes made in 2025, when Kenya moved to a system that taxes deposits and withdrawals instead.
What the Regulator Said
The Gambling Regulatory Authority (GRA) made its case before the National Assembly’s Finance and National Planning Committee on May 26.
GRA Director General Peter M. Karimi told MPs that prize competitions are “primarily marketing promotions where players do not even wager a stake.”
The regulator warned that taxing non-cash prizes — things like electronics, household items, spa treatments, or car servicing — would be practically impossible to enforce.
The GRA also asked Parliament to remove the definition of “winnings” from gambling law entirely, saying it creates classification problems.
The Dispute Over Chips and Credits
A separate issue came up around how to define taxable deposits.
Lawmakers are looking at broadening the tax base to include chips, tokens, and credits. But the GRA said these often come from free bets or promotions and don’t always have a real cash value.
The regulator argued this would make the tax system unpredictable and hard to manage for both operators and consumers.
Instead, the GRA is asking that the law only tax cash deposits made directly into a player’s wallet. This approach, it said, would keep the system straightforward.
The regulator pointed to results under the current framework as evidence it is working. Tax collections rose 11% to Ksh28.45 billion — around $220 million — by April 2026. That compares to Ksh25.24 billion, or about $195 million, in the year before.
The GRA credited the 2025 reforms for that growth. By taxing deposits and withdrawals, the government expanded the tax base without disrupting the industry.
Finance Bill 2026 still proposes a wider scope, covering deposits, withdrawals, and cash equivalents. MPs are now reviewing those proposals. Public submissions closed on May 25.
No final decision has been made. The bill remains under parliamentary review, and the outcome will shape how Kenya taxes gambling going forward.
The GRA’s position is clear: the current system is collecting more money, and expanding the tax to winnings and non-cash prizes risks making enforcement harder without adding much benefit.
