The Gambling Regulatory Authority (GRA) has called on lawmakers to reconsider proposed tax changes in Kenya’s Finance Bill 2026, warning that planned measures on gambling winnings from promotional and short-term lotteries could be difficult to implement in practice.
The GRA also raised concerns about a proposal to redefine taxable amounts deposited to include cash equivalents such as converted chips, tokens and credits.
Kenya’s Finance Bill 2026 proposes a 20% withholding tax on gambling winnings for both residents and non-residents. It would amend the Income Tax Act to tax winnings directly, reversing recent reforms that introduced a 5% levy on deposits and withdrawals.
Analysts note that the proposal would expand taxation to both withdrawals at 5% and winnings at 20% while broadening what qualifies as taxable deposits.
Appearing before the National Assembly’s Departmental Committee on Finance and National Planning, GRA Director General Peter M Karimi called for the removal of the clause introducing a 20% withholding tax on winnings from prize competitions and short-term lotteries.
Karimi said: “Prize competitions are primarily marketing tools where players do not wager any stake.”
He also noted that enforcing tax collection on non-cash prizes such as household goods, electronics, spa treatments and car servicing packages would be difficult in practice.
Besides prize competitions, the regulator expressed concern over a proposal to redefine amounts deposited to include cash equivalents like converted chips, tokens and credits.
According to the GRA, these instruments often originate from promotional offers and free bets which makes valuation inconsistent and complicates the tax base.
The GRA is undergoing major institutional reforms as it transitions into a state corporation under the Gambling Control Act 2025, replacing the former Betting Control and Licensing Board.
The reforms include plans to retain or manage a portion of gambling tax revenues to strengthen regulation, recruit around 200 staff and invest in surveillance systems to monitor online gambling activity.
The GRA plans to introduce a national lottery system and strengthen licensing processes before June 2026, as part of efforts to improve governance
