Govt to introduce Gaming tax and law

A law on gaming and betting is awaiting approval by the parliament in order to regulate and streamline activities in the country.The law will among others introduce taxes to the country’s budding gaming and betting industry.
Casino Kigali at Top Tower Hotel (File photo)
Casino Kigali at Top Tower Hotel (File photo)

A law on gaming and betting is awaiting approval by the parliament in order to regulate and streamline activities in the country.

The law will among others introduce taxes to the country’s budding gaming and betting industry.

Presenting the budget for the fiscal year 2011/12, the Minister of Finance, John Rwangombwa, said that the Rwanda Gaming Corporation (RGC) has not been paying taxes on these activities because the gaming law has not been passed.

Resultantly, he proposed the introduction of a special gaming tax of 13 percent and a withholding tax of 15 percent. 

“On the basis of activities performed in 2010, we expect collections in 2011/2012 of Rwf186.3million and Rwf859.9million in gaming special tax and withholding tax respectively,” the Minister said.

He said that the introduction of the gaming taxes will provide additional revenue of Rwf5.2billion, which will help to reduce the fuel tax adjustment loss from Rwf14.2billion to about Rwf9billion.

 According to Philip Brazoua, the CEO of RGC, the lack of regulatory laws has significantly slowed down the progress of the industry since its introduction in 2004. RGC, a public-private initiative in which the government has a 40 percent stake. It operates several gaming activities including Casino Kigali at Top Tower Hotel, lottery, slot machines and sports betting.

“The casino as well as over 200 video slot machines that we have on the market constitutes only 10 percent of what we have in stock,” Brazoua said.

 “Although we have over 8,000 slot machines stored up as well as other products, we cannot put them on market until there is a law that defines how they should and shouldn’t be used.”

 He added that in the absence of a governing framework, RGC activities are regulated by a ministerial order and operate under the ministry of sports to organise lotteries.

 “RGC was created by the government to mobilise revenue to support sports culture and arts. The creation of the company indicates the importance of gaming activities in the country,” he said, adding that: “The introduction of regulatory laws will help differentiate gaming activities from gambling habits that are illegal and derogative.”

“The company’s mandate is to create and maintain a world-class and responsible gaming experience, with the main objective of mobilising resources that would be channelled to support sports and culture and other national good causes.

Brazoua added that RGC contacted foreign investors who agreed to inject US$20million in the business, once the laws were in place. Statistics from RGC show that within three months from January to March 2011, gaming activities received a turnover of Rwf2.5 billion, whereas Rwf2billion went out to the participating candidates.

Gaming activities employ over 400 staff and RGC carries out internal training to improve the quality of staff. Brazoua is optimistic that the profitability of the industry in the short run, as well as its professional management, will become more beneficial to the economy once the regulatory and taxation law are in effect.

Ends

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