State goes after betting firms, seeks to raise more revenue
By Victor Mukabi, May 1, 2025The government is revving up revenue collection efforts with increased pursuit of businesses and the creative economy to meet its tax targets.
It has warned that a significant number of companies in the country risk losing their registration permits, following the failure to update their registration status.
Through the Business Registration Service (BRS), a state corporation mandated to administer the Companies Act, the government stated that private companies had been given until November 30, 2025, to make the necessary updates, but until now, the majority of them have yet to comply.
The companies were primarily obligated to file their returns and financial statements for a period of five years or more as stipulated by the set guidelines.
“On October 17, 2024, the Registrar issued Directive No. 1 of 2024 under Section 93a of the Companies Act. This directive allowed private companies until November 30, 2024, to comply with the requirement to file a copy of their register of beneficial owners,” BRS stated.
The notice added that “Consequently, in accordance with Section 894(1) of the Companies Act, the Registrar of Companies has formed a reasonable belief that the listed companies may not be conducting business or may not be operational.”
This, according to the government, was also in a bid to combat illicit financial flows in the country, where businesses were to submit the required files.
“Please note that failure to file the information for a period of 5 years shall lead to companies and LLPs being declared as not carrying on business and subsequently struck off from the Register as per Section 894 of the Companies Act and Section 33a of the Limited Liability Partnerships Act.”
The regulator now wants affected businesses to submit a letter in writing within 30 days from the day of the issuance of the notice indicating the status of their existence in the country.
Supporting evidence
The businesses are also required to provide supporting evidence, which may include: Recent financial statements or tax filings and Copies of active trade licenses, contracts, or invoices.
Also to be submitted are all outstanding statutory documents, including annual returns and the beneficial ownership register.
“If you do not respond to this inquiry within the specified timeframe of 30 days, further action may be taken under Section 894(2). This could include the issuance of a final letter and the publication of a notice in the Gazette, with the intention of removing your company’s name from the Register,” Gachugi Hiram, the deputy register of companies, warned in a notice.
At the same time, Kenya Revenue Authority (KRA) has issued a notice, informing all the licensed betting and gaming firms that the current operating licenses for the financial year 2024/2025 issued by the Betting Control & Licensing Board (BCLB) under the Betting, Lotteries and Gaming Act (BL&G Act) Cap. 131 are due to expire on June 30 2025.
“Clearance by KRA is a mandatory requirement for renewal of the licenses by the BCLB. In this regard, all betting and gaming operators are encouraged to update their tax matters with KRA to avoid any inconveniences,” KRA Commissioner, Large & Medium Taxpayers said in a notice.
As indicated in a document presented by KRA Chief Manager, Betting and Gaming, Joseph Otieno before the National Assembly Finance and Economic Planning Committee, the total revenue collection for the 2024/2025 up to March 2025 has been Sh19.6 billion against the 2023/2024 collection of Sh17.074 billion.
This indicated a surplus of Sh2.5 billion and a growth of 15 per cent.
Out of the Sh19.6 billion, Sh1.55 billion was collected in July last year, Sh2 billion in August, Sh2.66 billion in September, Sh2.19 billion in October, Sh1.8 billion in November, Sh2.59 billion in December, Sh2.12 billion in January, Sh2.26 billion in February and Sh2.36 billion in March.
On tax heads paid as at March, the report shows that with regards to Excise duty, the commission has so far collected Sh9.97 billion,n which is an increase of 24 per cent from the Sh8 billion collected in the 2023/2024 financial year.
Tax on winnings
Conversely, withholding tax on winnings, the document shows there is a decline of 15 per cent from Sh5.65 billion collected in the 2023/2024 financial year to Sh4.81 billion.
On the collection of betting and gaming tax, there was a 42 per cent increase from Sh3.39 billion to Sh4.8 billion.
“The legislative framework for the betting and gaming sector entails the operators registration for tax obligations, which include the Excise duty, Withholding Income Tax on winnings, betting and gaming Tax, Corporation income tax and Normal Withholding tax in accordance with the statutes,” the document highlights.
Otieno further told the MPs that there are over 200 betting and gaming firms, with about 170 of them being under the Sportsbook betting, where the aviator game of chance falls, out of which 49 companies have both sportsbook and public casino (virtual/online casino).
Further, in terms of taxes paid by the Aviator game of chance, the companies have paid Sh761 million, public gaming tax Sh1.68 billion and taxes on winnings, Sh2.2 billion.
“The aviator game of chance is classified as a digital game of chance under the Betting Licensing and Gaming Act and its taxation is aligned with the taxation regimes for the other betting and gaming activities which includes excise duty, withholding income tax on winnings, betting/ gaming tax and corporation income tax,” he explained.