Kenya has proposed a 20% withholding tax on gambling winnings under the Finance Bill 2026, potentially reversing parts of last year’s betting tax reforms.
The Bill entered public participation on May 11th, with submissions closing on May 25th. If approved, the measure would apply to winnings earned by both resident and non-resident persons.
The proposal would amend Kenya’s Income Tax Act by reintroducing a 20% withholding tax on winnings.
The proposed changes would sit alongside a 5% withholding tax on withdrawals from betting or gaming wallets. The Bill also seeks to broaden the definition of deposits to include funds converted into chips, tokens, credits or similar instruments used in gambling transactions.
The Finance Bill defines winnings as payouts from licensed betting, gaming, lottery or prize competition operators, excluding the amount originally staked or wagered. Withdrawals are defined as any money, cash equivalent or value paid or disbursed from gambling accounts.
The proposals form part of a wider effort by Kenya to increase tax revenue and strengthen oversight of digital transactions. The Finance Bill also includes provisions covering digital payments and virtual asset service providers, reflecting government concern over online financial flows.
Kenya remains one of Africa’s largest betting markets, supported by high mobile penetration and widespread use of mobile money services such as M-Pesa. Sports betting and online gaming have grown rapidly in the country, making the sector a regular target for fiscal reform.
Supporters of the proposed winnings tax argue that the measure would increase state revenue and improve accountability in a fast-growing digital gambling market. Critics warn that heavier taxation could push players towards offshore or unregulated platforms.
This debate mirrors a trend across African markets. Governments are seeking to capture more revenue from online betting while also responding to concerns around gambling harm, digital payments and informal or offshore activity.
The Bill now moves through further parliamentary scrutiny following the public participation process. If passed in its current form, it would mark another significant shift in Kenya’s approach to gambling taxation.
