Treasury Cabinet Secretary Ukur Yatani has 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.
“Following various consultations and in line with the government’s commitment on 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.
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.
Yatani noted that the adjustment is part of amendments under the Excise Duty Act that are set to generate an additional Ksh.50.4 billion to the exchequer for the FY 2022/23 budget.
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.
He claimed that the advent of new goods other than e-cigarettes has resulted in addictions that are badly impacting health.
“The design of these products and their taxation regime makes them easily accessible to users including to school children and the youth, thus leading to nicotine addiction and consequently smoking and use of other drugs,” said Yatani.
Betting firms have experienced a long road to legitimising their business in Kenya, a sector where a majority of Kenyan youth have minted millions of shillings at the comfort of their homes, thanks to internet penetration.
In August last year, the High Court in Nairobi declined a request by gaming and betting operators in the County to temporarily stop the implementation of a new law that allows the county government to charge higher fees for various licenses.
According to the Association of Gaming Operators of Kenya, the new tax is not conducive to betting business, given the disrupted business environment amid the coronavirus pandemic.
But Justice Anthony Mrima said the operators failed to lay the basis for the grant of the temporary order.
“Whereas petitions on infringement of Bill of Rights are not time-bound, a party, however, must account for the time between the alleged infringement or threat of infringement of the human rights and fundamental freedoms and the filing of the claim,” said the judge.
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.
