The Zimbabwean government has introduced a 10% withholding tax on gross winnings from sports betting as part of its 2025 national budget measures. Announced by Finance Minister Professor Mthuli Ncube during his budget presentation, the new tax is aimed at boosting government revenues and formalizing the rapidly growing gambling sector.
During the budget presentation, which took place at the parliament building in Mount Hampden last week, Ncube said: “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 withholding tax will be levied on all gross payouts to sports betting punters, regardless of the amount won. Ncube explained that this measure is part of a broader effort to increase revenue collection in a way that reflects activity in emerging sectors of the economy.
According to the Zimbabwe Mail, sports betting has seen exponential growth in the country, especially among young people, with the rise of online platforms and physical betting shops across urban centers. The government believes this tax will bring a portion of the sector’s proceeds into formal channels while ensuring participants contribute to national development.
Ncube stated: “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.”
The new tax is expected to generate significant revenue for the state, although precise figures have not been disclosed. Analysts project that the growing participation in sports betting could result in millions of dollars being channeled into the fiscus annually.
However, the announcement did not sit well with many bettors, as noted in local media reports. While some view it as a fair way to tax an entertainment-driven industry, others argue that it could discourage betting enthusiasts and potentially drive gamblers towards illegal, unregulated platforms.
Some operators in the sports betting industry have expressed concerns about the tax’s impact on their businesses. One betting operator, speaking anonymously, told the Zimbabwe Mail: “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 worry that the policy could inadvertently hurt the very players it seeks to tax, as winners might feel penalized for their success. Some punters argue that the tax unfairly targets them, as they already face risks in gambling.
The withholding tax on sports betting winnings is part of a broader fiscal strategy to widen the tax base and ensure that all sectors contribute to government revenues. Ncube also highlighted measures aimed at tightening fiscal discipline and ensuring the efficient allocation of resources in 2025.
The government also used the opportunity to emphasize the importance of responsible gambling. “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,” Ncube said.
Original article: https://www.yogonet.com/international/news/2024/12/02/86952-zimbabwe-government-to-levy-10-withholding-tax-on-sports-betting-winnings
