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Kenyans will now lose a portion of their funds every time they withdraw from their betting wallets, even if they haven’t won. The government’s new Finance Act 2025 imposes a 5% withholding tax on all withdrawals from betting and gaming accounts, marking a significant departure from the previous system that only taxed net winnings at 20%.
Under this new law, effective July 1, 2025, every withdrawal, whether it includes profits or just the original deposit, will incur this levy.
“If a player has deposited funds but decides to withdraw them without placing any bets, they could still face a five per cent tax on that withdrawal, despite not earning any income,” the Parliamentary Budget Office (PBO) stated.
PBO sounds warning about players moving to illegal sites
The PBO has raised concerns that the newly implemented tax on betting withdrawals could push players away from regulated platforms. This shift poses a threat to both government revenue and the overall growth of the betting industry.
According to the office, casual and small-scale bettors might find the 5% tax on all withdrawals, regardless of profit, to be a significant deterrent. As a result, there is a real risk that these players could turn to unregulated betting sites, which undermines the government’s aim to formalize and monitor the sector.
Several factors likely to affect projected revenues
The PBO anticipates that revenue from the betting sector could rise significantly from Ksh5.4 billion to Ksh11.4 billion. However, this optimistic projection faces several challenges that could hinder actual earnings.
A decline in the number of active accounts could sharply impact revenue, especially if players turn away from regulated platforms due to the new tax on withdrawals. Additionally, any legal challenges against this tax could create further complications, potentially halting revenue growth.
The office also identified concerns regarding the government’s plans to merge state corporations. Such mergers might lead to management overlaps, a loss of technical expertise, and disruptions in critical services across various sectors, including research, education, and agriculture.
Institutional resistance is another factor to consider, as agencies may worry about losing their autonomy, which could slow down the implementation process and negatively affect staff morale.
If these legal and regulatory hurdles aren’t effectively managed, they could significantly delay consolidation efforts and further impact
Source: Focus Gaming News
