Written By John Mutiso 📝
In the financial year that ended March 2022, Kenyan gamblers placed bets worth Sh169.1 billion via M-Pesa, indicating the windfall the National Treasury could reap from the industry through its proposed 20% excise tax on gaming.
According to Safaricom data, 732.29 million betting transactions were paid for through M-Pesa in the fiscal year ended March, as more Kenyans tried their luck in betting at a time when the economy is still struggling to recover from the lingering effects of the Covid-19 pandemic, which has slowed job creation.
The telco’s disclosures show a 23.8 per cent jump in betting revenues through M-Pesa which grew from Sh136.6 billion in the previous financial year to Sh169.1 billion during the period under review. The rise is despite Government increasing taxes and tightening advertising rules to cut gambling which has since become a multi-billion industry.
The telco received Sh5.98 billion from betting compared to the Sh4.26 billion that the company made in the previous financial year. The advent of mobile technology, mobile money services and increased internet penetration has made betting easy in Kenya.
The Treasury reintroduced excise duty on betting and gaming in July last year through the Finance Act 2021, at a rate of 7.5 percent of the amount staked, in a move that was expected to discourage punters from the habit.
The increased ‘sin’ of betting has also attracted the Kenya Revenue Authority (KRA). Excise duty on betting is now 30 per cent which is spread to all gaming transactions including prize competitions and non-charitable lotteries. The National Treasury is, through the Finance Bill 2022, proposing to increase excise duty on betting, gaming, prize competition and lottery from 7.5 per cent to 20 per cent.
The tax is part of the Treasury’s new proposals, which aim to raise Sh50.4 billion in new revenue to help fund the Sh3.31 trillion budget for the fiscal year beginning July 2022.