A plan by the Ugandan government amend Section 118C of the Income Tax Act cap 340 to impose a 15 per cent tax on sports betting is in the offing.

State minister for Planning David Bahati has stated that the proposed 15 percent tax levy on Pool table and sports betting winners is meant to discourage youths from the practice.

The Bill was gazzetted March 30 and will be debated in Parliament with a view of having the tax take effect on July 01, the start of the FY2017-18.

The bill proposes that “aperson who makes payments for winnings of sports betting or pool betting shall withhold tax on the gross amount of the payment, at the rate prescribed in Part X of the Third Schedule to this Act.”

According to the Third Schedule, “the withholding tax rate applicable to winnings from sports betting and pool betting is 15 per cent.”

As it stands, betting companies pay a 35 percent tax on the winnings. However the Ministry of Finance is now proposing to have the companies and winners of the bets share the tax.

A proposed amendment will see people who participate in sports betting part with at least 15 percent of their earnings while the betting companies will pay 20 percent. This means the amount of money won by those who involve in sports betting will reduce while the companies make more money.

On Monday, Minister Bahati told the Parliamentary committee on Finance Planning and Economic Development that the tax will discourage Ugandans from engaging in sports and pool betting.

Bahati’s remarks came after Patrick Opolot, the Kachumbala County Member of Parliament, had asked why Government appears to be legitimizing betting by making the winners also pay. He had questioned the essence behind the sharing of tax between the betting companies.

Bahati said government will have an equipment that will determine how much of the taxes should be collected by linking URA to betting companies.

Edgar Agaba, the Chief Executive Officer Gaming’s and Lottery Uganda, stated that they are planning to make gaming understood by people but also to ensure that the gaming companies in Uganda are compliant.

He said that taxes will be a great measure to deter people.

James Achidri, the Maracha East MP noted that some betting companies are feeling the pinch of the high taxes and ensuring that the winner and the companies share the tax is a great move.

According to the Uganda Lotteries and Gamings Board, Ugandans spend over 150 billion shillings in Casinos, slot machines, lotteries and betting annually. The Uganda government collects 30 billion shillings in taxes from the games and lottery companies.