Members of Parliament (MPs) have raised concerns over potential tax evasion by betting and gaming companies, following a reported discrepancy between excise duty collections and withholding tax from players’ winnings.
According to data presented by the Kenya Revenue Authority (KRA) to the National Assembly’s Finance and National Planning Committee, excise duty collected from betting activities increased by 24 percent to Sh9.9 billion between July 2024 and March 2025.
However, withholding tax from players’ winnings declined by Sh800 million during the same period.
KRA’s Chief Manager for Betting and Gaming, Joseph Otieno, attributed the rise in excise duty to enhanced compliance through automation.
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Otieno acknowledged the anomaly in withholding tax, citing variations in betting odds that influence payouts.
“While winnings are increasing, they’re not rising proportionately to the amount staked. That’s largely due to odds variations, which are regulated by the Betting Control and Licensing Board,” Otieno explained.
Molo Member of Parliament, Kuria Kimani, expressed skepticism over the explanation provided.
“The numbers don’t add up. If more people are betting and the companies are paying more in excise duty, then logically, the winning and thus the withholding tax should also increase,” he stated.
Kesses MP, Julius Ruto, echoed similar sentiments, calling for tighter regulation of the betting industry.
“We need to ensure that these companies are not manipulating outcomes to reduce payouts and evade taxes. It’s about fairness and ensuring the government collects rightful revenue,” Ruto remarked.
The committee has tasked KRA with investigating possible tax evasion by foreign-based betting firms operating in the country, following revelations that some offshore entities may have been operating illegally.
In response to the concerns, KRA has outlined several measures to curb tax evasion, including digital monitoring, real-time tax remittances, enforcement actions, third-party data collaboration, and public awareness campaigns.
The authority has also proposed increased collaboration with mobile network operators and the introduction of technological investments to enhance tax administration
