Kenya Revenue Authority pushes ADR to solve gambling disputes
The Kenya Revenue Authority (KRA) has urged taxpayers to use Alternative Dispute Resolution (ADR) to settle tax disputes. This has provided the betting and gambling sector with an alternative for settling disputes that may occur over taxation. KRA said, “Not all tax disputes have to end up in court. Through Alternative Dispute Resolution (ADR), you can engage us directly and work towards an amicable solution.”
As stated by the authority, ADR provides a voluntary framework for dispute resolution through structured dialogue. This approach allows taxpayers and the tax authority to engage in facilitated discussions to reach a mutually agreed settlement. These discussions take place outside the formal court system, reducing delays and procedural complications. The authority added, “To apply, submit a completed ADR application form and all supporting documents.”
How the ADR process works
Under the ADR framework, three parties participate in the dispute resolution process. These include the taxpayer, the Commissioner and an independent facilitator guiding discussions between both sides. The facilitator helps both parties clarify issues and move toward a mutually agreed settlement.
KRA noted that ADR encourages constructive engagement between taxpayers and the authority. The mechanism can also shorten the time required to resolve disputes compared to traditional litigation. Lower legal costs and faster outcomes make the process attractive to many taxpayers.
For the tax authority, ADR forms part of broader efforts to streamline tax administration procedures. It also supports faster settlement of disagreements while maintaining compliance with tax regulations.
Betting tax obligations in Kenya
Although the message targeted taxpayers across all sectors, the guidance is particularly relevant for Kenya’s gambling industry. The sector has faced increasing scrutiny from regulators and tax authorities in recent years.
Kenya maintains one of Africa’s most tightly regulated gambling markets. Operators must comply with multiple tax obligations administered by the Kenya Revenue Authority. These include a 15 per cent betting tax charged on gross gaming revenue. Gaming and lottery revenue also attracts a 15 per cent tax under the country’s regulatory framework.
Additional reforms introduced through the Finance Act 2025 expanded taxation across gambling transactions. The law introduced a 5 per cent excise duty on deposits made into betting wallets. A 5 per cent withholding tax now applies to withdrawals from betting or gaming wallets. This replaced the previous 20 per cent tax imposed on player winnings. The withdrawal levy applies to the total amount withdrawn from the wallet rather than profits. Licensed operators must also pay the standard 30 per cent corporate income tax on profits.
These layered obligations create a complex tax environment for gambling operators. Industry stakeholders often face disagreements regarding the interpretation or application of these taxes. ADR provides an option to resolve such disputes through dialogue rather than litigation. KRA encouraged taxpayers to approach the authority directly when disagreements arise. KRA added, “Explain to us, let us understand each other, and resolve it.”
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