The Kenyan Government has introduced a new 5% tax on all gambling withdrawals under the Finance Act 2025. This means the Kenya Revenue Authority (KRA) will now take a 5% cut from every withdrawal made by players, even if no bet has been placed. The new rule applies to all forms of gaming, including betting, lotteries, and online gaming platforms.

This means that even when a player withdraws their own money without placing a bet, the tax will still apply. For example, if a player deposits KSH 1,000 ($7.74) and later withdraws it without betting, they will still lose KSH 50 to taxes. The tax is part of the government’s plan to boost revenue from the fast-growing gaming industry.

Government Hopes to Boost Tax Revenue

The Parliamentary Budget Office (PBO) said this new law could nearly double the government’s gaming tax earnings. Officials say the new tax will help betting companies follow the rules and stop tax cheating. Gambling has become a big part of Kenya’s economy, especially with the growth of online and mobile betting.

However, the Parliamentary Budget Office (PBO) warned that players may see the tax as unfair. Many people might not understand why they are being taxed on money they didn’t win or even use to bet. The PBO also said the rule could push players to unlicensed gambling sites, which could hurt the local industry and reduce the government’s expected earnings.

Concerns Over Fairness and Market Impact

Critics believe the new tax could hurt Kenya’s growing online gaming market. The PBO said it might stop players from using licensed betting sites and slow down the growth of the industry, which also helps mobile money companies and tech startups.

In the past few years, the government has struggled to meet its tax goals. In 2023/24, it planned to collect KSH 211 billion in new taxes but missed the target by KSH 205 billion. The next year was similar, leading to protests and even the storming of Parliament on June 25, 2024.

Other Proposed Gambling Rules

The new gambling tax comes with other plans to tighten gambling rules in Kenya. Lawmakers have proposed raising the legal gambling age from 18 to 21 and increasing the minimum bet to KSH 50. Dagoretti North MP Beatrice Elachi said the aim is to stop young people from gambling by making it harder for them to take part.

The government also recently placed a 30-day ban on gambling ads after seeing a big increase in betting activity. This 5% withdrawal tax is meant to help the government earn more money and control the gambling industry. However, it is still unclear if the move will work as planned or drive players away from licensed betting platforms.