- Tanzania follows in the footsteps of Kenya and Uganda, as it introduces a gaming tax on the value of individual winnings through casinos and sports betting.
Gaming Tax in Tanzania has received a renewed drive as part of efforts to discourage the addiction to sports betting. This direction is a result of key changes to its Gaming Act. Tanzania now charges levies of 12% and 10% on the amount or value of all winnings in casinos and sports betting, respectively.
According to Tanzania’s Finance Act 2022, how it works is that the licensee of gaming activity will withhold gaming tax on winnings made and paid for, and then remit it on or before the seventh day of the month following the month of payment of the winnings.
The withholding agent is required to submit a return or certificate of payment of tax withheld within 15 days after the end of each calendar month.
Unlike in the past, when Tanzania only focused on the taxation of revenue of betting firms through levies that ranged between 12 and 25%, the country now goes after individual gamblers, with a plan to discourage this bad habit while also generating some revenue.
This move strengthens a trend in which EAC countries are clamping down on gambling addiction through disciplinary taxation and other regulatory measures.
Gaming Tax In Tanzania: Countries with Similar Development
Africataxreview.com gathered that in Kenya, earlier this year, the government attempted to raise the tax on betting stakes to 20%.
Presently, gamblers pay a 20% tax on their winnings, which betting firms are expected to withhold and remit to the Kenya Revenue Authority (KRA). This levy is in addition to corporate income taxes levied on the gambling and gaming business.
In Uganda, the tax levied on gaming winnings has been set at 15% and withheld by betting firms for remission to the government.
In a proposal submitted by the Treasury Cabinet Secretary Ukur Yatani, he aimed to levy heavier taxes on punters by increasing the excise duty on cash staked on betting, gaming, a prize competition, and buying a lottery ticket from the current 7.5%, but this was shot down by the MPs.
Mr. Yatani. stated that gambling had become a costly addiction that can invite terrible consequences.
According to a survey by the Central Bank of Kenya (CBK), Kenya National Bureau of Statistics (KNBS), and Financial Sector Deepening Trust (FSD) in Kenya, the elderly Kenyans aged 55 and above bet 49 times a week on average. A number that is very high compared to that of all other age groups.
However, the bet placed by them is the least among all age sets at Sh735, showing that unlike, most youthful players, they only gamble for leisure.
In the survey, 13.9% of respondents identified as active gamblers, with 18.4% of those who bet being in urban areas and 11.4% in rural areas.
It further revealed that the government’s conscious measures to fight irresponsible and illegal betting might be partly responsible for the decrease in the percentage of gamblers who consider gaming as a source of income.
This percentage dropped from 22.7% in 2019 to 11.2% in 2021 and the average amount used for betting dropped to Sh2,559 in 2019 compared to Sh939 in 2021.
According to data from the industry, gaming in Kenya generates an average of Sh200 billion annually. This is evident in the financial data of telecommunication firms such as Safaricom.
For example, gamblers in Kenya sunk Sh169.1 billion into bets through the M-Pesa mobile money platform in the year to March this year.
According to data provided by Safaricom, 732.29 million betting transactions were executed through M-Pesa in the financial year that ended in March as more people turned to bet at a time when the economy was striving to recover from the catastrophic effects of the Covid-19 pandemic.
The value of bets placed at the time, reflected a 23.8% increase from the Sh136.58 billion in the previous year, despite the heavy tax placed by the government to regulate the sector.
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