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{
    "id": 1348054,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1348054/?format=api",
    "text_counter": 188,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": " Thank you very much, Hon. Temporary Speaker. At the outset, I thank the Departmental Committee on Sports and Culture, for the good work done on this Bill. However, as you are aware as per our Standing Orders – as the Chairman of the Departmental Committee on Finance and National Planning – I communicated to the Hon. Speaker of our intention that Clauses 45 and 46 be handled by the Committee because they touch on taxation. We have a meeting with the stakeholders’ tomorrow. Thereafter we will also table our own findings and report. We will also move amendments on these Clauses. There are at least 117 betting and gaming firms operating in Kenya. Most of them operate on online platforms. The matter of betting and gaming in this country is very thorny. Sometimes it is difficult to have a stand on this matter. This is because some religions, for example, Islam, ban gaming. We are aware of the side effects of gaming, for example, it is an addictive game. Young people across the country make betting their day-to-day business. Most of them, instead of going to work, spend their time betting. I have never engaged in betting, apart from the raffle tickets that I buy for a church function or such things. But I have seen what betting addiction has done to people. However, there are benefits that accrue in this sector. One of them is the contribution to our revenue collection. I will take you through a quick look at the figures. In the Financial Year 2022/2023, a sum of Ksh6.64 billion was collected through Excise Duty on betting services. Withholding Tax on winnings from betting and gaming generated Ksh8.68 billion. That is a total of Ksh15.32 billion. That is an increase compared to Ksh11 billion in the previous year. That means that if we compare the amount collected in the Financial Years 2021/2022 and 2022/2023, an extra sum of Ksh4 billion was collected. After the enactment of the Finance Act, where we increased the Withholding Tax and Excise Duty, in the first quarter of this Financial Year 2023/2024, a sum of Ksh3.26 billion was collected through Excise Duty on betting services. Withholding Tax on betting generated a sum of Ksh3.3 billion. That is a total of Ksh6.56 billion. Therefore, if this projection continues for the rest of the year, and those taxes are not altered, we are likely to collect about Ksh24 billion. That is Ksh10 billion more than what we collected in the last financial year. Therefore, the betting sector remains critical in terms of revenue for this country. We need this revenue to help move our country forward and ensure that we rely on our own resources rather than borrowing. However, there is need to re-look at some of these taxes and how they are administered. We need to find a way of reducing the cost of tax administration but effectively raise more revenues. For example, Excise Duty on gaming is at 7.5 per cent. Additionally, the companies pay their Corporate Tax of 30 per cent out of their profits. There is also a 20 per cent Withholding Tax on winnings. Currently, there is a proposal to introduce Betting Tax at 15 per cent. There is also proposed new tax on gambling at 15 per cent. In addition to all that, there is Value Added Tax (VAT) and Pay as You Earn (PAYE). That is why the Departmental Committee on Sports and Culture attempted to propose that there be a gross game revenue to have one flat-rate for the gaming sector. That way, more money would be left with the Pandas. Consequently, the chances of winning will go up leading to increase in tax revenues. That would be as a result of a simplified tax process but at the same time we will be ensuring that the cost of administration on taxes for the players is reduced. I do not want to pre-empt the decision that the Committee will make after its deliberations but these are some of the options that we are looking at and deliberating on. Last week, the National Tax Policy was tabled. We hope that it will be up for debate before we proceed for recess. It is in the Order Paper this afternoon but I doubt if we will get to that Order. In that policy, we propose to have a more predictive tax environment. In this case, a business that is set up in Kenya can ascertain that within a given period, the taxes are The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor"
}