Betting companies play a pivotal role in the government’s tax revenue. Tax collections from betting are projected to double by June 2026. This comes despite lower rates under the Finance Act 2025. The law cut excise duty on wagered amounts and withholding on winnings to five percent.
The Parliamentary Budget Office projects revenue will rise from Sh5.4 billion to Sh11.4 billion. The growth comes from new tax measures on gambling. Punters now pay five percent when moving money from mobile wallets to betting wallets. They also pay the same rate when withdrawing, even without placing a bet.
“This new change is expected to increase revenue collection from Sh5.4 billion to Sh11.4 billion,” PBO said in its Budget Watch 2025 report. The law defines a “withdrawal” as any amount taken from a betting wallet, including the stake. Residents and non-residents will pay tax on the full amount withdrawn.
Previously, excise duty was 15 percent and applied when placing a bet. Now, transferring Sh100 into a betting wallet attracts a Sh5 charge before betting. The law also clarified that a wager is the amount transferred into a licensed betting wallet. Earlier, a 20 percent withholding tax applied only to winnings. Under the new rule, withdrawing Sh100 also attracts a Sh5 withholding charge.
The tax now applies to the withdrawn amount, not just winnings. A punter loses about Sh9.75 for every Sh100 deposited and withdrawn without betting. This includes Sh5 at deposit and Sh4.75 at withdrawal.
KPMG analysts say the lower duty may attract more gamblers. However, they warn about responsible betting. PBO expects the new tax structure to boost government revenue. It also warns that the double tax could drive punters to illegal betting platforms
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