Finance Bill 2026: Gambling Authority opposes proposed taxation of winnings
By Faith Lagat, May 26, 2026The Gambling Regulatory Authority (GRA) has urged Parliament to review proposed tax amendments contained in the Finance Bill (National Assembly Bills No. 26 of 2026), warning that provisions targeting prize competitions and winnings may be impractical to implement.
The authority appeared before the National Assembly’s Departmental Committee on Finance and National Planning on Tuesday, May 26, 2026, to present its concerns.
GRA Director General Peter M. Karimi called for the removal of a clause proposing a 20 per cent Withholding Tax (WHT) on winnings from prize competitions and short-term lotteries.
He argued that the provision, which had been reintroduced from the 2024/2025 financial year, does not reflect the operational nature of such promotions.
“Prize competitions are primarily marketing tools where players do not wager any stake,” he said.
Karimi further noted that enforcing tax collection on non-cash prizes such as household goods, electronics, shopping vouchers, spa treatments, or car servicing would be difficult in practice. He added that the definition of winnings should be removed from gambling frameworks to avoid enforcement and classification challenges.
Proposed redefinition of deposits and tax base concerns
The authority also opposed proposals to expand the definition of taxable deposits to include cash equivalents such as chips, tokens, and credits. According to the GRA, these instruments often originate from promotional offers and free bets, making valuation inconsistent and the tax base more complex.
The regulator recommended that the definition be limited strictly to cash deposits made into a punter’s wallet from any source. It argued that this approach would ensure a simpler, more stable, and predictable tax system.
The GRA also highlighted that Kenya’s gambling tax framework has already undergone reforms that have significantly improved revenue collection. Data shared with the Kenya Revenue Authority (KRA) indicates that gambling tax revenue increased by 11 per cent to Ksh28.45 billion by April 2026, up from Ksh25.24 billion in the 2024/2025 financial year.
The growth has been attributed to 2025 tax amendments introducing levies on deposits and withdrawals, which broadened the tax base.
Institutional reforms
The GRA’s submissions come as it transitions into a fully-fledged state corporation under the Gambling Control Act 2025, succeeding the Betting Control and Licensing Board. Director General Karimi, who recently assumed office, also outlined broader reforms aimed at strengthening regulation and oversight of the sector.
He indicated plans for a framework that could allow the authority to retain or directly manage portions of taxes and levies collected from gambling operators. The proposal is aimed at improving regulatory capacity, enhancing compliance, and supporting development programmes linked to the sector.
The authority also plans to recruit nearly 200 staff and invest in surveillance systems to monitor online gambling operations. It further intends to introduce a national lottery system and strengthen licensing processes ahead of a June 2026 rollout period, as part of efforts to improve governance in a rapidly expanding digital gambling market.