Government Introduces 10% Withholding Tax on Sports Betting Winnings

Spread the love

HARARE – 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 formalising the rapidly growing gambling sector.

The withholding tax, which comes into effect from 1 January 2025, will be levied on all gross payouts to sports betting punters, regardless of the amount won. Prof. 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.

Sports betting has seen exponential growth in Zimbabwe, especially among young people, with the rise of online platforms and physical betting shops across urban centres. The government believes this tax will bring a portion of the sector’s proceeds into formal channels while ensuring participants contribute to national development.

Prof. 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 channelled into the fiscus annually.

However, the announcement has sparked mixed reactions. 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.

A Harare-based economist, Tinashe Masimba, praised the move, saying, “This is a much-needed intervention in a sector that has been largely untaxed despite its massive profitability. However, the government must ensure that proper mechanisms are in place to collect this tax efficiently.”

Operators in the sports betting industry have expressed concerns about the tax’s impact on their businesses. One betting operator, speaking anonymously, said, “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 penalised for their success.

Punters, too, have had mixed reactions. Some argue that the tax unfairly targets them, as they already face risks in gambling. “We are the ones taking chances with our money. Why should the government take such a big cut when we win?” questioned one sports bettor in downtown Harare.

On the other hand, others expressed understanding, noting that the tax is consistent with global practices.

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. Prof. Ncube also highlighted measures aimed at tightening fiscal discipline and ensuring ethe fficient allocation of resources in 2025.

In line with these efforts, the Finance Minister noted that the government would be prioritising investments in critical areas such as healthcare, education, and infrastructure development, using funds raised from new revenue streams like the sports betting tax.

The government also used the opportunity to emphasise 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,” Prof. Ncube said.

As the clock ticks toward implementation, stakeholders in the sports betting industry, punters, and the general public are watching closely to see how this new policy will unfold and its impact on one of Zimbabwe’s fastest-growing sectors.