The fight against gambling addiction has received a boost after the High Court dismissed a petition challenging new gambling-related taxes in the Excise Duty Act, 2015, as amended by the Finance Act, 2023.
Justice Stephen Mbungi, sitting in Kakamega, ruled that the amendments introducing a 12.5% excise duty on amounts staked in betting activities did not violate the Constitution and did not amount to double taxation, as claimed by the petitioner.
“It is a cardinal principle of law that all provisions of a statute should be read holistically, not in isolation,” Justice Mbungi said. He added that Paragraph 4A of the Excise Duty Act “is not in contravention” of the Constitution, which renders void any law inconsistent with it.
The petition, filed on August 21, 2023, by Mr. Edward Okwama, named the National Assembly, Milestone Gaming Limited, Standard Global East Africa, the Kenya Revenue Authority (KRA), and the Attorney General as respondents.
The main dispute was over the legality of the new excise duty, which charges 12.5% on the amount wagered, played, or staked by punters. The petitioner argued that this, combined with the 20% withholding tax on winnings, was discriminatory and unconstitutional under Article 27.
However, the court found a clear distinction between the two taxes. Excise duty is charged when a punter places a bet, while withholding tax is applied only when a punter wins. “Gross Gaming Revenue under the Betting Lotteries and Gaming Act is a separate tax levied on betting companies, while excise duty is levied on punters,” Justice Mbungi ruled.
The National Assembly had defended the law-making process, citing Article 95 of the Constitution, which gives Parliament the mandate to enact laws such as the Finance Act, 2023.
The judgment means both the 12.5% excise duty on stakes and the 20% withholding tax on winnings will continue to apply to betting activities in Kenya.
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