daniel chigunwe
Robson Sharuko
H-Metro Editor
THE country’s booming sports betting industry was buzzing yesterday after Finance Minister Professor Mthuli Ncube announced a proposal for a 10% tax on gross income from winning bets beginning in January next year.
Tens of thousands of Zimbabweans are now part of this industry, gambling from as low as US$1 to as high as US$10 000, on bets related to sports activities around the world with football, cricket and horse racing the dominant fields.
Most of the transactions are conducted in United States dollars and the number of betting houses has also increased, which is a sign that the industry is booming.
The punters have been pocketing every cent which they win but that could change in the wake of the proposal by Min Ncube for a tax to be imposed on their earnings on the occasions they win.
“Honourable Members would be aware that betting is popular in nature, as indicated by the proliferation of sports betting houses countrywide,” Min Ncube said as he presented the 2025 National Budget.
“Sports betting punters, however, receive income from winnings, which is currently not taxable under Personal Income Tax.
“To include punters in the tax base, I propose to introduce a 10% Withholding Tax on gross winnings of sports betting punters, with effect from 1 January.”
The proposal drew gasps among legislators when it was announced and drove the punters’ WhatsApp groups into meltdown as the gamblers discussed the latest developments.
The sports betting firms in this country even run accounts, similar to bank accounts, where the punters can keep their money and play whenever they feel like, even from the comfort of their homes.
“I guess it was coming,” one gambler told H-Metro.
“I can say the betting companies invited this on us. When I started seeing the betting companies putting pictures of guys who would have won big amounts like US$55 000, all over the places, I sensed this was coming.
“It was always going to be difficult to justify that someone is earning US$300 a month, and is taxed, while those who get to earn such big sums are not taxed.”
Another punter said:
“I was told that these companies pay taxes to the Government and I thought that also covered us but I can see that I was wrong.
“Maybe, it’s tie for us to come up with an association which represents us and can be asked to come and represent us when they are planning such budgets.
“I am saying that if, for instance, we had an association which represents us, the guys would have gone and said let’s start with about five percent and, maybe, that would have been a good starting point.
“I blame kandege, everyone is talking about kandege and I saw a picture of someone who was said to have won tens of thousands and I knew this would invite problems for us.”
But, what is the situation in other countries?
ZAMBIA
The Zambian market, just like the local one, is booming and some betting firms, like AfricaBet and BolaBet, operate in both markets.
There are over 30 betting companies currently operating in Zambia.
The Zambian Government reduced withholding tax on winnings from gaming and betting from 20% to 15% for the years 2023 and 2024.
Delivering the 2025 National Budget, Finance Minister Situmbeko Musokotwane proposed that the State should also get 10 percent of every amount a punter bets.
“I propose to introduce excise duty at the rate of 10% on the betting amount.”
SOUTH AFRICA
Gambling revenues in South Africa hit a record ZAR59.3bn during the 2023-24 financial year, while player spending also reached an all-time high.
The revenue was 25.7% higher than the ZAR47.12bn in 2022-23.
The biggest chunk from the revenue came from sports betting which generated ZAR35.91bn.
South Africa generated ZAR4.84bn in tax during the period under review and half of this amount, ZAR2.41bn, came from sports betting.
South African authorities have also juggled with taxing punters, especially those involved in frequent gambling activities and who generate regular income, which had to be declared to SARS.
There was even a proposal for a 15% withholding tax on earnings exceeding ZAR25,000.
AUSTRALIA, CANADA,
UNITED STATES
In the three countries, sports betting winnings are considered taxable income and the tax rate can range from 10% to 37%.
“If you have winnings of US$5,000 or more, the business may withhold up to 24% of the proceeds for federal income tax,” H&R Block, the American tax company which operates in the three countries, said.
“Lumping all of your bets together (called netting transactions) is unfortunately not permitted. You need to report each wagering transaction separately.
“You can’t reduce your gambling winnings by your gambling losses and report the difference.”
Online Reporter