- Uganda looking to introduce 15% on sports betting wins
- Ugandan players faced with the prospect of paying taxes on their gambling winnings for the first time
Sports bettors from Uganda might have to start paying taxes on their winnings if the latest proposal outlined by the government of this African country finds the required support.
The proposal suggests a 15% tax on all sports betting winnings, which would be payable by players, leaving operators to pick up another 20%.
Good news for betting operators?
The current law in Uganda taxes only the site operators. They are required to pay a 35% tax, while the players have no obligations in this regard. The new proposal, which is a part of the Income Tax Amendment Bill 2017, would introduce important changes, taking off a part of the burden from the betting operators and transferring it to bettors.
David Bahati, the state minister for planning, is the person behind the gambling taxation reform. His plan would leave operators in charge of 20% of the overall tax, but the rest of it would be the responsibility of players themselves.
If these amendments are accepted, this will be the first time Ugandan players will be faced with prospects of having to pay taxes on their sports betting wins.
Much needed reforms
According to Bahati, these reforms are necessary, since the country currently has one of the highest taxation rates for the operators. Taking into account difficulties with the implementation and the fact gambling is a “zero-sum game”, the minister believes that the burden should be shared between players and game organizers.
Apart from trying to bring more money into the state budget, this reform has other goals. There is a very strong anti-gambling movement in Uganda, and a number of politicians are in favor of banning gambling activities altogether. Supporters of the ban see these activities as a source of serious problems, as some young people are reportedly leaving real jobs in favor of engaging in sports betting full time.
However, others don’t see an outright ban as a proper solution, as that would only encourage illegal, “under the table” activities, creating an even more dangerous and damaging environment. Instead, the government wants to try to introduce strict regulations, and the latest taxation reform is a part of these efforts.
While these reforms could help turn youth in the country towards seeking gainful employment, they should also make Uganda more appealing for sports betting operators. If the tax is reduced to 20% instead of the current 35%, the change could encourage more investments in the sector.
Finally, wanting to implement this reform properly, Uganda will establish a national monitoring system, with the purpose of tracking and dealing with any illegal betting transactions.
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