Players in Ghana will no longer be hit with a 10% tax on winnings.
The country’s President, John Dramani Mahama, has officially scrapped the tax on betting, gaming and lottery winnings as part of a wider shift in Ghana’s fiscal and regulatory stance on the gambling sector.
The decision reverses a tax policy introduced less than two years ago by Ghana’s previous political regime under former President Nana Akufo-Addo.
At the time, it was argued that the tax would address the prevalence of gambling, particularly among young people, and increase domestic revenue.
The 10% tax applied exclusively to winnings and was automatically deducted at the point of payout.
The removal of the tax is good news for operators and players alike, as there had been a recent push to increase the tax to 50%.
Finance Minister Dr. Cassiel Ato Forson, who announced the repeal of the gambling tax last month, stated that this is just the first move in a wider plan to scrap withholding taxes on all types of lottery and gaming.
It also sits alongside the removal of other taxes such as the Electronic Transfer Levy, a 1% charge on electronic transactions, and the Emissions tax. Getting rid of these taxes fits with the Ghanaian Government’s plans to ease the financial burden on its citizens.
A valuable source of income
The decision to remove the gambling tax has not been met with universal approval, however.
Before the Government introduced its budget in March, the Institute of Economic Affairs urged the Government to retain the tax but reduce it to 5%, arguing that the tax was useful for both “revenue and deterrence purposes”.
Meanwhile, KPMG estimates that the widespread abolition of taxes could lead to a cumulative revenue loss of approximately GHS6.4bn ($369.6m).
As operators continue to focus their efforts on the potential of the wider African market, critics have suggested the removal of the tax is incentivising gambling and may lead to long-term societal costs.
In recent weeks, the Gaming Authority in Ghana has stated its intention to intensify its efforts around the regulation of the gambling industry, especially regarding the location of gambling venues.
Commissioner Emmanuel Siisi Quainoo has emphasised during a recent meeting that the body is aiming to tackle the level of gambling venues in areas that could see an increased impact on the most vulnerable corners of society.
The framework is set to be around zoning rules and the enforcement of gambling compliance as the sector continues to grow in terms of engagement.
