Gambling to be taxed at 40%

By The Inspirer.

Members of Parliament have approved the draft law that increases the tax imposed on companies offering gambling services, raising it from 13% to 40%.

Gambling is widespread among both youth and adults, with cases of individuals suffering negative consequences, including losing their money to the point of requiring mental health support.

On the other hand, the gambling industry generates significant revenue, with gambling service providers earning RWF 640 billion in 2024, up from RWF 251 billion in 2023.

The Minister of State in the Ministry of Finance and Economic Planning, Geofrey Kabera, presented the draft law to Parliament on March 19, 2025. He explained that the tax increase aims to expand the tax base, simplify tax collection, and discourage activities that negatively impact public health.

He stated, “The gambling tax has been revised, increasing from 13% to 40%. Additionally, the withholding tax on winnings will rise from 15% to 25% of the prize value.”

Kabera also announced that the changes include exempting gambling service providers from profit tax to ease their operational burden.

Additionally, a tax on profits has been introduced for digital businesses that operate in Rwanda without a physical presence, such as Google and Amazon.

The Value Added Tax (VAT) will also increase from 5% to 10%, but its scope will expand to cover the sale of shares, clothing, licenses, and collateral.

MP Théogène Munyangeyo acknowledged the need to raise gambling taxes but warned that tripling the rate might drive operators out of Rwanda, potentially pushing gambling underground.

“It seems like a ban, yet some people have already invested significantly in this sector,” he said. “If we impose strict restrictions, I fear illegal gambling will increase, especially since neighboring countries have such services. Someone in Rusizi, for example, could simply cross to Bukavu to gamble.”

He also pointed out that some gamblers use unregistered online platforms, which should be addressed.

Minister Kabera reassured Parliament that the gambling industry is mature enough to handle the new tax rate without disruption.

“This is the right time to increase the tax. While we raised the tax on one side, we removed the profit tax to ease the burden on operators,” he explained.

He emphasized that the goal is to regulate gambling to prevent harm while ensuring that it contributes to national revenue for public projects.