Kenya Imposes 5% Tax on All Betting Wallet Withdrawals
Kenya has implemented a 5% withholding tax on all withdrawals from betting and gaming wallets under the Finance Act 2025 effective July 1, replacing the previous 20% tax on net winnings with a levy on every withdrawal regardless of betting activity.
Tax Applies to Deposits Without Wagering Activity
The Parliamentary Budget Office report clarified the tax applies even when players withdraw funds without placing bets. “If a player has deposited funds but decides to withdraw them without placing any bets, they could still face a five percent tax on that withdrawal, despite not earning any income,” according to the Star. The PBO provided a practical example: “In simple terms, if a player deposits $7.74 and later withdraws it without betting, they would lose $0.39.”
Business Insider characterized the measure as “blanket taxation” and warned it could “discourage casual gamblers and push players away from formal platforms.” The Finance Act 2025 simultaneously reduced excise duty on deposits from 15% to 5%, applied when money transfers from mobile wallets into betting accounts to simplify operator tax collection.
Government Projects Revenue Increase to $88.27 Million
The Kenya Revenue Authority will enforce the levy, with government projecting betting sector revenue nearly doubling from $41.81 million to $88.27 million in the 2025/26 fiscal year, according to PBO reports. The tax aims to simplify enforcement, broaden the tax base, and reduce revenue leakages, though long-term impacts on Kenya’s online gambling market remain uncertain.
Mobile money operators and technology startups relying on online gaming may face challenges as players adjust to withdrawal taxation. The fundamental change in how players interact with platforms will test whether the policy strengthens government revenue or drives bettors toward unregulated alternatives.
Recommended