Zimbabwe introduced a 10% withholding tax on gross winnings of punters at a betting shop and on online betting platforms operated by land-based bookmakers. There is no distinction between taxation on sports wagers and gambling at a casino. This development signifies a key change in gambling taxation in Zimbabwe while also raising questions of equity, compliance and socioeconomic effects in a nation already suffering from rampant poverty.
Gambling taxation around the world often comes under the umbrella of sin or harmful taxes. However, because of the cash flow intensity of the gambling industry and relatively low political cost of taxation, governments are increasingly turning to this sector for public revenue collection. In the case of Zimbabwe, the introduction of gambling taxation seems to be motivated by the idea of broadening the tax base while tapping into a sector that experiences rapid growth. This reasoning should be interrogated in the context of a society that is already plagued by poverty and unemployment.
Gambling tax is not uncommon. Some countries in Africa and the world have imposed gambling taxes. For instance, Kenya implements a 7.5% tax on betting stakes and a 20% withholding tax on winnings. South Africa employs a 15% withholding tax on gambling winnings above R25,000. In the United Kingdom, the tax is 15% on gross gambling yield, and winnings are not taxed.
Zimbabwe enters this space at a time of global best practices still in development, offering examples and cautionary tales. Its system combines a 3% bookmaker’s tax on gross betting receipts and a 10% withholding tax on punters’ winnings, with no exemption thresholds. This structure places direct compliance obligations on bookmakers while creating a final tax liability on individuals. Operators and bettors alike will need to adjust reporting processes and transaction tracking mechanisms to ensure proper withholding, remittance and audit readiness under the new rules.
We appeal to the authorities to view gambling sector not only as a source of revenue but also consider the need to protect the vulnerable groups. In this context of adject poverty, the system should be executed with deep socio-economic sensitivity and forward-looking executive judgment. A system of minimum threshold such as that in South Africa may go a long way in addressing this cause.