In November 2024, Zimbabwe’s Finance Minister Mthuli Ncube presented the national budget to parliament, drawing attention to the rapid growth of sports betting throughout the country. In response to this burgeoning industry, Ncube proposed a 10% withholding tax on gross winnings from sports betting, aiming to capture revenue that was previously untaxed and not contributing directly to the treasury.
The measure, one of only four new taxes introduced that day, took effect on January 1, applying to all local betting shops and online platforms operated by land-based bookmakers. According to The Herald, a local newspaper, Zimbabwe’s gambling industry generated around $120 million in revenue in 2023, with online betting accounting for $45 million of that total. The finance minister projected that the new tax could bring in up to $15 million annually by 2025, based on expected gross winnings of $150 million.
This surge in betting activity has been driven by increased internet penetration and smartphone use across Zimbabwe, with more than 5.2 million devices in circulation. The number of online bettors grew by 15% in 2024, reaching approximately 300,000, with the majority aged between 18 and 35.
For operators in Zimbabwe, compliance with the new tax regime has proven costly and complex. Marvellous Tapera, founder of the tax consultancy WTS Tax Matrix, explained that bookmakers must now update their transaction and reporting systems to automatically deduct the 10% levy from winnings. This has involved significant investments, including system upgrades that could cost up to $50,000 per platform, as well as annual tax reporting expenses averaging $20,000 for each bookmaker.
The flat nature of the 10% withholding tax has raised fairness concerns, particularly in a low-income economy like Zimbabwe’s. Tapera noted the tax is socially regressive, disproportionately affecting lower-income and casual bettors compared to wealthier individuals. The tax could reduce operators’ profit margins, forcing them to adjust odds to offset losses and potentially drive bettors to unregulated platforms.
Some suggest Zimbabwe could learn from South Africa, where a more progressive model exists. South Africa imposes a 15% withholding tax only on winnings above a certain threshold, protecting casual players while ensuring substantial revenue from larger winnings. If Zimbabwe adopted a similar structure or exemption threshold, the system might be fairer and still effective at generating revenue.
South Africa’s gambling sector saw significant growth, with a $3.4 billion gross gaming revenue (GGR) reported for the 2023-24 financial year, increasing to $4.3 billion in 2024-25. Despite plans to implement a withholding tax on winnings back in 2011, the South African government had not yet enacted the tax by February 2025 due to industry pushback.
The current economic climate in Zimbabwe, marked by high unemployment and inflation, calls for a balance between revenue generation and social protection. Carefully structured, a withholding tax on winnings could achieve this balance, ensuring those gambling to supplement low incomes are not unduly burdened or incentivized to turn to illegal gambling options.
Looking across Africa, Kenya recently introduced a 5% withdrawal tax, replacing a previous 20% tax on net winnings. This move is expected to double government revenue from $35 million to $74 million in the 2025-26 fiscal year. However, such broad tax measures could discourage casual bettors and drive them away from regulated platforms, as noted in Kenya’s budget document ‘The Budget Watch 2025.’
In Zimbabwe, a representative from a prominent land-based betting operator expressed concern that the withholding tax could exacerbate the shift from physical betting venues to online platforms. With mobile penetration increasing to 102.64% in the second quarter of 2025 and internet penetration rising to 81.83%, the accessibility of online betting is drawing many punters away from traditional outlets. The representative noted that some employees have even faced disciplinary actions for placing bets online during work hours using company resources.
The concern is that the withholding tax might accelerate the migration to online betting, leaving brick-and-mortar locations struggling to attract customers, particularly those without smartphones or reliable internet access. The shift towards digital betting reflects broader trends in Zimbabwe’s connectivity, with the Postal and Regulatory Authority of Zimbabwe reporting a steady increase in mobile and internet penetration throughout the year.
As Zimbabwe navigates the challenges and opportunities presented by its withholding tax policy, the country must balance generating vital government revenue with fostering a fair and equitable betting environment that considers the diverse economic realities of its population.
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