Tanzania implemented a gaming tax on the quantity or value of earnings from casinos and sports betting earlier this month, tightening the noose on gamblers already squeezed by levies in neighboring Kenya and Uganda.

Tanzania said levies of 12% and 10% are now applicable on the amount or value of all winnings in casinos and sports betting, respectively, in changes to its Gaming Act, joining East African Community partners Kenya and Uganda, which have already gone hard on gamblers with punitive taxes to discourage the addictive habit.

"A gaming licensee is required to withhold gaming tax on winnings made and paid for." The licensee is the withholding agent in this case, and is required to "remit the tax withheld on or before the seventh day of the month following the month of payment of the winnings; and submit a return or certificate of payment of tax withheld within 15 days after the end of each calendar month," according to Tanzania's Finance Act 2022.

Until last month, Tanzania has primarily concentrated on taxing betting enterprises' earnings through levies ranging from 12% to 25%. Its recent tax action indicates that it is targeting individual gamblers in the hopes of discouraging them through harsh taxes while simultaneously generating income from eager die-hard gamers.

In Kenya, gamblers currently pay a 20% tax on wins, which betting companies must withhold and return to the Kenya Revenue Authority (KRA). This means that if a person wins Sh1,000, he or she will only receive Sh800 because the KRA removes Sh200. Individual earnings are taxed in addition to corporate income taxes placed on the gambling and gaming industry.

In Uganda, a 15% tax on the value of gaming winnings is levied and withheld by gaming companies for remission to the revenue authorities.

Tanzania's action reinforces an EAC trend of cracking down on gambling addiction through punitive taxation and other regulatory measures.

In Kenya, the government has attempted to tighten the noose around gamblers, even seeking earlier this year to hike the tax on betting stakes to 20%.

Treasury Cabinet Secretary Ukur Yatani sought to increase the excise duty on funds risked on betting, gaming, a prize competition, or purchasing a lottery ticket from the existing 7.5 percent in a proposal rejected by MPs.

Mr. Yatani stated in his unsuccessful plea that gambling and gaming had become "highly addictive and can result in a range of detrimental implications, particularly to the youth."