The war against addiction to gambling has made a major win after the High Court, dismissed a Petition against enactment of implementation several clauses of the Excise Duty Act, 2015, as amended by the Finance Act, 2023.

In the decision delivered by, Justice Stephen Mbungi, sitting in Kakamega, the High Court found that enactment of the said clauses on the gambling-related taxes had not violated the Constitution, and did not amount to double taxation ad alleged by the Petitioner.

"It is a cardinal principle of the law on interpretation of a statute that all the provisions of the statute should be read in a holistic manner but not in isolation," ruled the Judge.

He added:  "It is my finding that Paragraph 4A of Part II of the First Schedule of the excise duty act of 2015 as amended by the Finance Act of 2023 is NOT in contravention of Article 2(4) of the Constitution which provides that any law, including customary law, that is inconsistent with this constitution is void to the extent of the inconsistency."

The Petition dating back to August 21, 2023 had been filed by on3le Mr. Edward Okwama, who enlisted the National Assembly as a respondent alongside Milestone Gaming Limited, Standard Global East Africa, the Kenya Revenue Authority, and the Attorney General.

In its objection to the Petition, the National Assembly had defended the legislative process leading to enactment of the said Law, and in particular Article 95 of the Constitution on enactment of the Finance Act 2023, that actualization the said clauses.

The main matter in contention in the Petition was legality of Paragraph 4A of Part II of the First Schedule to the Excise Duty Act, 2015, as amended by the Finance Act, 2023 that imposed a 12.5% excise duty on the amount staked by persons participating in betting activities.  

The Petitioner had claimed the imposition of 12.5 % Excise Duty on amount wagered, played or staked plus an additional 20% Withholding Tax on winnings and not subjecting the same requirement to similarly situated persons in the country was discriminatory  and in contravention of Article 27 of the Constitution and  therefore ought to be declared null and void.

In his Judgement, however, the Judge found that  there was a clear distinction when excise duty is levied on a punter (the person betting) upon staking and when withholding tax is levied on a punter upon winning. 

"The difference is clearly discernible in this, just like in the earlier one. Gross Gaming Revenue under Section 29(a) of the Betting Lotteries and Gaming Act (Cap 131) is a distinct tax just like Excise Duty. It is levied on the betting companies while the excise duty is levied on punters," ruled the Judge.

He added: "Therefore, it cannot amount to double taxation. Similarly, it is not the same tax."