The Minister of Finance Matia Kasaija signed the amendments proposal which, if passed, will take effect in the next financial year on July 1.
The Ministry of Finance has tabled a proposal to increase gaming and lotteries tax by 10 percent under the Lotteries and Gaming (Amendment) Bill, 2023. Here are some of the highlights.
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The proposal seeks to amend various provisions under the Lotteries and Gaming Act, 2016, notably the tax rate from 20 percent to 30 percent.
It is currently being reviewed by Parliament.
Invitations were sent out to stakeholders and other interested parties to submit their views to the Parliamentary Committee on Finance, Planning, and Economic Development.
Although it is expected to have a significant impact on the gaming industry, the Bill is a big win for revenue.
The gaming industry has expanded rapidly in recent years mainly due to digital acceleration in sports betting and online gambling.
Revenue performance
However, there are some compliance issues affecting tax collection in the industry.
In the URA annual revenue performance report for the financial year 2021/22, there was a surplus in tax collected from casinos, which resulted in a significant increase in revenue attributed to gaming tax arrears recovery amounting to Shs35.65 billion.
This resulted in a surplus of Shs22.67 billion attributed to compliance enforcement actions that saw taxpayers file and make payments instead of making estimated payments like in previous years.
The tax body also reported that it collected Shs53.68 billion indicating a 303.41 percent increase.
Criticism
Nonetheless, critics hold firm that the gaming industry is not worth the negative social and economic consequences for the public. They argue that vulnerable populations continue to suffer under the influence of the industry.
Investment risks
Stakeholders argue that the amendment will put the industry at risk because it will discourage investors.
Plans for social rehabilitation
However, proponents of the amendment argue that the increment will cushion some of the negative effects by availing funds for social initiatives and programmes.
The lotteries and gaming industry is expected to experience more growth in the near future owing to the acceleration of mobile technology and digital services as well as the rising disposable income levels in the public.