Dar es Salaam. The Gaming Board of Tanzania (GBT) has proposed a 10 percent tax on virtual games following the country’s enactment of legislations permitting this form of gambling.
Reports from the GBT say operators offering virtual games would be required to pay 10 percent tax on gross gaming revenues from the virtue games should the recommendations be approved.
The GBT has a responsibility to regulate gambling in the country and advise the government on tax, levies and fees issues for gaming.
October 2019, the government approved legalisation of virtual gambling games as part of a number of amendments to the country’s Gaming Act leaving tax rates unconfirmed.
Following the suggestions, the board has organized a stakeholders’ meeting tomorrow to deliberate on the government plans.
Other than virtual games, the 2019 amendments to the law introduced a number of other changes, including the new licence categories for profit lotteries, service providers, entities supplying goods or services to operators and gaming consultants.
The amendment also provides the board with given new powers to approve operators to advertise their products, a move that ends a partial ban on advertising of the same in the country.
When contacted yesterday, GBT director general James Mbalwe declined to provide details on the proposal, insisting that everything would be unveiled tomorrow during the stakeholders’ meeting.
“Attend the stakeholders’ meeting on Monday and write your story after collecting stakeholder opinions,” he said over the phone without disclosing the venue of the meeting.
However, The Citizen have independently established that the meeting will be held at the PSPF Towers here starting at 10am.
Speaking to The Citizen, gaming stakeholders chairman Jimmy Kennedy confirmed to have received an invitation to the meeting to discuss changes on taxation to virtual games in the country.
According to him, the government was collecting two percent of revenue collected from sales made from virtual games as compared to 10 percent of the profit as to preliminary information received.
“We will be in a position to provide detailed comment on the matter after attending the meeting and listening to their proposals as well as reasons for the changes. Also, we will have an opportunity to present our opinions,” he said.
According to him, they collected more revenue in live games as compared to virtual games; therefore the new suggestions “However, we will give our position after the meeting whether the new proposals will be friendly to stakeholders or not. This is after telling us reasons for the changes and systems that will be used to calculate the 10 percent,” he said.
He said the 2019 report by the Tanzania Revenue Authority (TRA), gaming contributed 3.5 percent to the country’s gross domestic product (GDP).
Mr Kennedy commended the government for increased stakeholder’s involvement in different issues, saying it was probably its efforts to nurture the industry especially during transformations.
“Not only has the government been involving us in various matters, but it also has been immediately implementing or finding solutions to issues that require our involvement,” he said.
Recent reports from the GBT show that the sub-sector contributed Sh78 billion to the government coffers during the 2018/19 fiscal year up from Sh11.4 billion in 2012/13 financial year.
The GBT projected to collect over Sh100 billion in the 2019/20 financial year, according to the GBT.
“Amendments made by the government on sections of the laws governing the gaming sub-sector is country intended to improve revenue collection and ensure it makes significant contributions to the country’s economic growth,” Mr Mbalwe told The Citizen during Sabasaba exhibitions last year.
He said the government was planning to improve some issues regarding tax, make close monitoring of the sub-sector in order to increase revenue collection.
He unveiled that the government had enacted a system that would manage revenue collection and increase transparency among stakeholders and that the system will operational in the 2019/20 financial year.
“Through this system, the board will be able to monitor revenue generated by gaming service providers and make accurate estimations of the government’s income. The system will also reduce fraud among its players,” he said.
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