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MPs approve higher taxes for betting firms

Gambling companies will start paying higher taxes sooner than originally planned after MPs approved the increases and changed the law on betting, lotteries and gaming.

The firms will now have to pay 7.5 per cent of their revenue to the taxman by the 20th of each month after paying out winnings, while lotteries will pay five per cent of their turnover by the same deadline.

Gaming companies will also hand in 12 per cent of their revenue after paying out winnings.

For competitions in which one has to pay to take part, the prize competition tax has been set at 15 per cent of the total gross turnover.

The changes were made via the Finance Bill, which was passed by a handful of MPs on Tuesday evening and were proposed by the Finance Committee on behalf of the Treasury.

Finance Committee chairman Benjamin Lang’at said he expected the Finance Bill to be enacted by the end of the week, paving the way for a new tax regime for the companies from next week.

Majority Leader Aden Duale said the changes were backed by the Treasury, which had also asked him to withdraw the Betting, Gaming and Lotteries Bill, which went through the Second Reading last week.

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“Members should know that the Bill has been withdrawn and for tidiness, those amendments will be in the Finance Bill,” said Mr Duale.

Deputy Minority Leader Jakoyo Midiwo said: “I like the fact that the government is making an attempt to tax this industry. I support the withdrawal so we don’t have to wait for that Bill to be passed.”

Another Bill to regulate the betting and gaming sector was in the offing, he added.

Mr Midiwo and Mr Duale were at the head of an attempt last month to set up a special committee to inquire into the growing industry and come up with measures to tame it. But MPs rejected the motion to set up the committee.

A proposal to take the power to decide the tax rate for beer made from sorghum, millet and cassava from the Treasury Cabinet Secretary however caused heated debate.

Mr Midiwo, who last week brought a petition against East African Breweries Limited, proposed the change to the law on behalf of Kiambu Town MP Jude Njomo.

The contentious law states: “The Cabinet Secretary may by notice in the Gazette, grant remission of excise duty, wholly or partially, in respect of beer or wine made from sorghum, millet or cassava or any other agricultural products, (excluding barley), grown in Kenya.”