Kenya imposes 5 per cent tax on all betting wallet withdrawals, even if no bets are placed
Under the Finance Act 2025, players are taxed 5 per cent on every wallet withdrawal in the country.
Kenya.- Kenya has introduced a 5 per cent withholding tax on all withdrawals from betting and gaming wallets under the Finance Act 2025. The tax applies even if no bets are placed, marking a significant shift from the previous system, where only winnings were taxed.
Previously, players paid a 20 per cent tax only on net winnings, but the new law, effective July 1, 2025, ensures that every withdrawal from a betting account, whether profit or the original deposit, is subject to a 5 per cent levy.
The Parliamentary Budget Office (PBO) report stated, according to the Star: “If a player has deposited funds but decides to withdraw them without placing any bets, they could still face a five per cent tax on that withdrawal, despite not earning any income.”
In regard to the implications for bettors, the PBO report stated: “In simple terms, if a player deposits Sh1,000 ($7) and later withdraws it without betting, they would lose Sh50 ($0.35).”
A Business Insider report described this as “blanket taxation” and warned that these measures could “discourage casual gamblers and push players away from formal platforms”, raising concerns about the long-term sustainability of the industry.
The Finance Act 2025 also cuts the excise duty on deposits from 15 per cent to 5 per cent, which is applied whenever money is transferred from a mobile wallet into a betting account. This change is designed to make tax collection easier for operators and reduce extra paperwork.
Betting tax: Revenue boost, player risk
The Kenya Revenue Authority (KRA) is responsible for enforcing the levy, and the government expects revenue from the betting sector to nearly double, from Sh5.4bn ($35m) to Sh11.4bn ($74m) in the 2025/26 fiscal year, according to the PBO report.
The tax aims to simplify enforcement, broaden the tax base and reduce revenue leakages. While the short-term fiscal boost may be significant, the long-term impact on Kenya’s rapidly growing online gambling market is uncertain. Mobile money operators and tech startups that rely on online gaming may face challenges as players adjust to the new rules.
Kenya’s online gambling sector now faces a critical test: the tax on wallets, not just winnings, fundamentally changes how players interact with platforms, and the coming months will reveal whether it strengthens government revenue or drives bettors away.
