New 25% tax on betting winnings takes effect

… if you win US$20 on a football match, US$5 (25 percent) will be withheld as tax…_

 

_… the law also imposes a further 20% tax on the gross monthly takings of betting operators…_

 

Punters who win bets in Zimbabwe will immediately see a quarter of their prize being withheld by the gaming operator before being transmitted to the Government under a new tax regime introduced on Monday through the promulgation of the Finance Act.

Under the regulations, gaming operators —including sports betting firms, casinos and lottery providers — are now required to deduct 25 percent of a punter’s gross winnings at the point of payout.

For example, if a punter wins US$20 on a football match, US$5 (25 percent) will be withheld as tax, and the punter will receive US$15.

The gaming company must then report and forward that US$5 to ZIMRA.

The new measures are provided for under the Finance Act, which was signed into law this week by President Mnangagwa and take effect from January 1.

Reads the Finance Act: “Every gaming operator shall withhold twenty-five per centum of the punter’s gross winnings or aggregate gross winnings (as the case may be) from which the punter is paid out the winnings by the gaming operator with whom the punter placed the bet or bets or bought the ticket concerned; for which purpose, the gaming operator concerned shall, no later than the tenth day of the month following the month in which the gaming operator paid out those winnings or aggregate winnings (or within such further time as the Commissioner may for good cause allow), pay to the Commissioner the punters tax due from such punter.”

Since the deducted amount will be remitted to ZIMRA by the 10th day of the following month, the regulations make the operators the primary collection agents for the Government.

The operator must also submit a detailed return for each winning customer by the 5th of the month.

“The gaming operator shall provide the Commissioner with a return in respect of each punter the gaming operator paid out, no later than the fifth day of the month following the month in which the gaming operator collected those takings, or within such further time as the Commissioner may for good cause shown allow, in a form approved by the Commissioner, showing – the amount of the punters tax; and the amount of the gross winnings from which the tax is paid.”

In addition to taxing punters, the law also imposes a 20 percent tax on the gross monthly takings of gaming operators.

Operators are required to pay the tax monthly and submit returns to ZIMRA, with the tax also treated as final.

“Every gaming operator shall pay twenty per centum of his or her gross takings in every month to the Commissioner no later than the tenth day of the month following the month in which the gaming operator collected those takings, or within such further time as the Commissioner may for good cause allow. Payment of gaming operators tax shall be treated as a final tax.

“The gaming operator shall provide the Commissioner with a return no later than the fifth day of the month following the month in which the gaming operator collected those takings, or within such further time as the Commissioner may for good cause shown allow, in a form approved by the Commissioner, showing — the amount of the gaming operators tax; and the amount of the gross takings from which the tax is paid.”

ZIMRA has powers under the law to recover unpaid gaming and punters’ taxes as debts due to the State, with penalties equal to the unpaid tax for non-compliance, although penalties may be waived where failure to pay was not intentional.

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube announced the tax changes during the presentation of the 2026 National Budget.

He cited the rapid expansion of the betting and gambling industry and the need to strengthen revenue collection.

“Government has noted the growth of the betting and gambling industry over the past decade, with the emergence of sports betting, lotteries, and casino gaming,” he said.

“Preliminary industry data indicates an annual increase in revenue of about 8 percent to 10 percent during the period 2023 to 2024.

“The rise in betting-related vices which include addiction, indebtedness, suicide and loss of productive hours has outpaced the existing regulatory controls.

“In addition, widespread profit-shifting practices and underdeclaration of revenues have resulted in under-taxation of a rapidly expanding sector.”

In line with international best practice, Prof Ncube said betting and casino operators are commonly taxed on a turnover basis at rates of between 15 and 30 percent, prompting Zimbabwe to raise its Bookmakers Tax from three percent to 20 percent and the punters’ tax from 10 percent to 25 percent.

Government expects the new tax regime to significantly increase revenue collections from the sector and improve compliance, as taxes are collected directly at source through licensed operators.

In recent years, Zimbabwe’s betting and gaming industry has expanded rapidly to become one of the most visible segments of the country’s leisure and entertainment economy.

What began largely as traditional sports betting and limited casino gaming has evolved into a vibrant digital and retail wagering sector attracting millions of participants, particularly youth and urban populations.

Sports betting — especially on football matches — has become the cornerstone of the industry, drawing widespread participation. *_-Herald_*