BILL PROPOSING HIGHER TAXES ON GAMING INDUSTRY SET TO BE PASSED NEXT WEEK

A security guard frisks customers outside a betting parlour in Nairobi's city centre on July 30, 2016. MPs have rejected a Motion to form a committee to investigate betting companies. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

By JOHN NGIRACHU

A law meant to draw more revenue from the betting, lotteries and gaming industry is set to be passed next week after MPs approved its Second Reading.

Although it was introduced in the National Assembly in June last year, the Second Reading of the Betting, Lotteries and Gaming Bill took place on Thursday.

MPs backed the Bill and described it as a proper legal method of getting the growing industry to pay more taxes, ensuring that part of the billions the industry makes annually goes into funding the Budget.

The Bill is sponsored by the Executive through Majority Leader Aden Duale and it was placed back on the agenda of the National Assembly after an attempt to create a special committee to scrutinise the industry flopped.

Mr Duale said the Bill is an opportunity to raise the taxation levels and asked MPs to introduce higher taxes when the Bill gets to the next and last stage in the legislation pipeline.

“This Bill is meant to discourage gambling. Either we gamble and pay huge taxes so that we build roads and provide better healthcare (or stop),” said Mr Duale.

He said the Bill would be brought for the last stage next week and asked MPs to introduce changes so that some of the taxes are raised from five to 15 or 20 per cent.

“We must introduce a law in this House to prevent gambling from becoming a channel for money laundering and tax evasion,” he added.

He said there will also be a law in the future to prevent children from gambling and to set the minimum fines.

Kandara MP Alice Wahome said Parliament would also need to legislate on where casinos and gaming parlours are located.

In other countries, gaming parlours are located in high-end places to encourage the rich, those who have more disposable income, to gamble.

Ms Wahome said the casinos and gaming parlours that allow minors access should have their licences withdrawn without recourse to the law.

“We have seen lotteries that come up too quickly, receive money and then they are closed,” said Ms Wahome.

She said that with many lured by the deceptive claim that they would win a lot of money by participating in the lotteries, a lot of people, many of them poor, are squandering their hard-earned cash away.

Kajiado East MP Peris Tobiko expressed concerns that the youth are being roped into lotteries using digital technology and getting entrapped in the habit at a very young age.

Dr Wilbur Ottichilo (Emuhaya, ODM) said: “We need strict regulation on this lottery and gaming in this country otherwise this country will become a gambling country and if it becomes a gambling country, nobody will work.”

TAXMAN'S CUT

Under the proposed new law, bookmakers will be required to keep for the taxman 7.5 per cent of the money they collect from bets.

By introducing the Bill, Treasury acted on the basis that under the Constitution, the imposition of taxation is the responsibility of the national government.

“The Bill seeks to amend (the existing law) to introduce tax to be paid by gaming operators of lotteries, gaming  and prize competition in Kenya, which currently do not pay any tax,” says the Bill.

Some of the taxes on betting were repealed in the year 2000.

Bookmakers will be required to pay the proposed tax to Kenya Revenue Authority.

Those who run lotteries will be required to hand over to the taxman five per cent of the money they collect.

This would affect the Kenya Charity Sweepstakes and similar organisations where the winners are determined by the random drawing of numbers or tickets or dice and where the promoter aims to collect more money than they can give out.

These, too, will be required to hand over the money to the KRA on the 20th day of the month following the month of collection.

Casino operators, who are mostly involved in gaming, will be charged 12 per cent of their gross revenue, which they will also be required to hand over to the taxman.

For prize competitions, the tax payable shall be 15 per cent of the gross turnover based on the cost of entry.

CREDIT: NMG