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Zambia: 2023 National Budget – government to relook gaming, betting and lotteries industry

13 October 2022
– 3 Minute Read

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Historically, the gaming and betting industry in Zambia has been characterised by an overlap of responsibility among government ministries, and although there has been rapid growth in the gaming and lotteries industry, the regulatory framework has been fragmented, hampering smooth oversight and collection of revenue.

To overcome the various challenges characterising this industry, during the Budget presentation the Minister announced that the Government is currently in the process of developing a gaming and lotteries policy, which will, among other things, facilitate the harmonisation of the various pieces of legislation governing the industry.

In particular, the Minister revealed that to increase participation in the industry, the Government will reduce the presumptive tax from the current 25% to 15% for land-based (brick and mortar) betting companies for the charge years 2023 and 2024.

The Minister also proposes to reduce withholding tax on winnings from gaming and betting from the current 20% to 15%, barely a year after implementing the tax, which was first introduced in 2014. This measure, applicable for the charge years 2023 and 2024, is intended to improve compliance and lower the tax burden for the industry and its consumers.

Further, to increase tax compliance, the Government proposes to introduce, under the Income Tax Act, specific penalties for negligence, wilful default and fraud with respect to presumptive tax on gaming machines and casino games (brick and mortar). These penalties will be as follows:

  • half of the undeclared tax is due as a penalty for negligence;
  • the equivalent of undeclared tax will be payable for wilful default; and
  • one and a half times the amount of the undeclared tax for fraud.

In addition, the Government intends to extend the fiscalisation to taxpayers registered under Turnover Tax and Presumptive Tax on Gaming and Betting. This measure is intended to improve tax compliance and enhance domestic resource mobilisation.

Other measures include amendments to the Value Added Tax Exemption Order to include gaming, betting and lotteries as a way of remedying the difficulties in accounting for tax in the industry and improving administrative efficiency. The measure will also align the taxation of the industry with international good practice.

Lastly, the Minister announced that the Government will expand the use of electronic fiscal devices with enhanced functionality to all eligible taxpayers and that it will be extended to turnover tax and the gaming and betting industry.

These measures, alongside stimulating growth in the industry, will create a unified regulatory framework to allow for the effective collection of revenue from all businesses in the industry, consequently strengthening the country’s economy.