Zimbabwe Introduces 10% Withholding Tax on Sports Betting Winnings
The Zimbabwean government has announced a 10% withholding tax on gross sports betting winnings, effective January 1, 2025. This policy, outlined by Finance Minister Professor Mthuli Ncube in the 2025 national budget, aims to formalize the rapidly growing betting industry and bolster government revenues.
Objective of the Tax
The tax applies to all sports betting winnings, regardless of the amount. Professor Ncube highlighted the need to include bettors in the national tax base, stating, “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.”
This initiative is part of a broader government strategy to capture revenue from emerging sectors like sports betting, which has seen a surge in popularity in recent years.
Growth of Sports Betting in Zimbabwe
Sports betting has become a prominent activity in Zimbabwe, particularly among younger demographics. Both online platforms and physical betting shops have contributed to this growth, especially in urban areas.
Ncube underscored the importance of leveraging this booming industry for national development, explaining, “The popularity of sports betting has surged in recent years, becoming a lucrative industry. This 10% withholding tax ensures that the government can tap into this revenue stream for the benefit of all citizens.”
Mixed Reactions from Stakeholders
While the government anticipates significant revenue from the tax, responses from stakeholders have been mixed. Some bettors see the measure as a fair way to regulate the industry, but others worry it could deter participation.
An anonymous betting operator expressed concern to the Zimbabwe Mail, stating, “A 10% withholding tax on winnings might discourage participation, particularly among small-scale punters. It will also require significant adjustments to our systems to comply with the new law.”
Others fear that the tax might inadvertently drive gamblers to unregulated platforms, bypassing formal channels and complicating efforts to formalize the industry.
Balancing Revenue and Responsible Gambling
In his address, Ncube emphasized the importance of promoting responsible gambling alongside the new tax policy. “While we aim to tax this sector for development, we must also encourage participants to gamble responsibly and avoid excessive indulgence that can lead to financial and social problems,” he remarked.
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