Ethiopia Raises Gaming Taxes to 25% Under New Revenue Generation Plan
Ethiopia has implemented significant tax increases on its gaming sector through Proclamation No. 1395/2025. Meanwhile, the government raised taxes on gambling winnings from 15% to between 20% and 25%. Additionally, operators continue paying a 15% turnover tax on total stakes. Furthermore, these changes target revenue generation from one of Africa’s expanding gaming markets.
Tax Structure Targets Multiple Revenue Streams
The new regulations affect various gaming activities including lotteries, prize draws, and sports betting. Specifically, licensed operators face the higher withholding tax rates on player winnings. Moreover, they must maintain existing compliance and reporting requirements alongside the increased tax burden. The Ministry of Revenue justifies these modifications as part of a broader domestic revenue enhancement strategy.
However, the National Lottery Administration frames the taxation changes differently. They argue that regulatory measures protect the public from negative gambling consequences. Consequently, officials aim to balance revenue generation with responsible gaming promotion. Nevertheless, industry experts predict these rates will influence both player behavior and operator performance across the sector.
Market Impact Threatens Player Participation
Increased taxation will inevitably reduce player payouts and promotional incentives. Therefore, occasional players from low- and middle-income groups may decrease their participation. Similarly, high-frequency players will likely place smaller individual stakes despite continued engagement. Tax specialists warn that higher rates might drive customers toward unlicensed or offshore operators offering better returns.
Smaller and mid-sized gaming businesses face particular challenges from the combined tax burden. Furthermore, turnover taxes, withholding requirements, and compliance costs create significant financial pressure. Consequently, some operators may struggle to maintain profitability under the new taxation framework. Ethiopia’s approach aligns with regional trends, as Kenya imposes 20% winnings tax and South Africa applies 6-15% rates depending on provincial regulations.
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