Kenya’s Gambling Regulatory Authority opposes proposed return of 20% winnings tax
Regulator warns Finance Bill 2026 proposals would be entirely impracticable to enforce as MPs review Kenya’s planned gambling tax overhaul.
Kenya.- Kenya’s Gambling Regulatory Authority (GRA) has urged MPs to drop Finance Bill 2026 proposals that would reintroduce a 20 per cent tax on gambling winnings, warning that the measure would be difficult to enforce.
The regulator said it made its case before the National Assembly Departmental Committee on Finance and National Planning during stakeholder hearings on May 26, according to a Parliament of Kenya statement reported by People Daily.
At the centre of the GRA’s objections is a proposal to introduce a 20 per cent withholding tax (WHT) on winnings from prize competitions and short-term lotteries. Kenya’s Finance Bill 2026 proposes reintroducing a 20 per cent withholding tax on gambling winnings, effectively reversing elements of the country’s 2025 gambling-tax reforms, which shifted taxation towards deposits and withdrawals.
Peter M. Karimi, GRA director general, told MPs the proposal, revived from measures linked to the 2024/2025 financial year, fails to reflect the operational realities of prize promotions. “Prize competitions are primarily marketing promotions where players do not even wager a stake,” the regulator said in submissions to lawmakers.
The authority argued that collecting taxes on non-cash rewards such as household goods, electronics, shopping vouchers, spa treatments and car servicing would be “practicably not enforceable”. The regulator also called on MPs to remove the definition of “winnings” from gambling regulatory frameworks altogether, citing implementation and classification difficulties.
Tax base expansion concerns
Beyond prize competitions, the GRA raised concerns over plans to broaden the definition of taxable deposits to include cash equivalents such as converted chips, tokens and credits. The authority said such instruments often originate from promotions and free bets, meaning their values may not always reflect direct cash equivalents and could unnecessarily complicate the tax base.
Instead, the GRA proposed limiting the definition strictly to cash deposits made into a punter’s wallet “from any source” in order to maintain what it described as a “simple, stable and predictable” tax regime. The authority also defended Kenya’s current gambling taxation framework, saying recent reforms had already boosted state revenues significantly.
Parliament’s statement said figures shared during the committee session and corroborated with the Kenya Revenue Authority (KRA) showed gambling tax collections rose 11 per cent to Ksh28.45bn (US$220m) by April 2026, compared with Ksh25.24bn (US$195m) collected during the 2024/2025 financial year. The GRA attributed the increase to 2025 amendments introducing levies on gambling deposits and withdrawals, which expanded the country’s tax base without harming sector growth.
The Bill also proposes broader definitions covering gambling deposits, withdrawals and cash equivalents – measures that have drawn growing scrutiny during the parliamentary review process. The Bill is currently undergoing parliamentary scrutiny following the close of public participation submissions on May 25, before lawmakers consider possible amendments.
