State pushes for 20% excise duty on punters for second time
The National Treasury Cabinet Secretary Ukur Yatani seeks to increase excise duty as changes are made to the Excise Duty Act.
Changes that have been proposed to the Excise Duty Act through the Finance bill 2022 will see punters pay 20 percent of their money as excise duty from 7.5 percent whether they win or not.
This comes as a way of trying to curb betting which has become increasingly prevalent in the country.
“Following various consultations and in line with the government’s commitment to mitigating against the social vices associated with betting activities, the National Treasury and Planning will be proposing to the National Assembly, the reintroduction of the excise duty on betting within the next six months,” Yatani said in a statement on July 2, 2020, following the removal of the levy.
The Finance bill seeks to get a total of Ksh.50.4 billion in new taxes to fund the Ksh.3.31 trillion budget for the year starting July 2022.
If the tax is passed by Members of Parliament (MPs), betting companies will be required to implement the 20 percent increase from July 1, 2022.
This comes even as Yatani in his budget speech before legislatures on April 7, proposed a 15 percent excise duty on alcohol, gaming, and gambling advertisements.
This will apply to all television stations and other advertising outlets like billboards.
This, according to Yatani is to discourage betting and consumption of alcohol that has taken shape among the Kenyan youth.
“Gambling, gaming, and alcohol addiction have become prevalent in our society. These habits are extremely addictive and can result in a variety of harmful repercussions, especially for the youth. Advertisements for alcoholic beverages, betting, and gaming contributes greatly to the promotion of these habits. To discourage the promotion of these products and activities,” he said.
On the same note, Yatani proposed changing the taxation regime for liquid nicotine from the current shillings per unit to an excise duty of Ksh.70 per millilitre.
If passed by parliament, e-cigarettes, commonly known as vaporizers or vapes, will be more expensive, ensuring that they are not readily available.
Since the government introduced taxation on proceeds from betting, it has caused rage among bettors, many finding it unreasonable to place any bet over a major slash on what they get after placing a bet.
In 2019, AGOK outlined the formula that is being used on 20 percent withholding tax on proceeds of betting in compliance with the government directive.