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Ghana Introduces Source Tax on Gambling Winnings

Published: Friday, October 6, 2023

The Ghana Revenue Authority (GRA) recently made a significant announcement that will have a substantial impact on the gambling industry in the country. Effective from Tuesday, August 15, the GRA has implemented a source tax on all gross winnings from gambling activities. This means that a 10% tax will be deducted from the earnings of every win.

As per the amendment to the Income Tax Act of 2023, specifically Law No. 1094, the previous 15% Value Added Tax (VAT) rate that applied to each bet will no longer be in effect.

Having made this announcement in a forum held in Accra, Edward Gyamerah, the Commissioner of National Taxes at the GRA, stated that the Authority aims to collect approximately 1.2 billion Ghanaian Cedis (GH) as revenue from lottery operations by the end of the year.

This development comes in the wake of the introduction of the Income Tax Act (Amendment) of 2023, Law 1094, which classifies the Gross Gambling Revenue (GGR) of operators and winnings by players as taxable income.

According to Gyamerah, the GRA estimates that they will mobilize over 3 billion GH in 2024 alone.

Gyamerah emphasized that if a player's gross winnings from lottery operations and the payment received were in a form other than cash, lottery operators would be required to deduct source tax based on the prevailing market value of the prize.

He stressed that failure to deduct and remit the tax to the Authority could lead to the revocation of the lottery operator's license.

As a tax withholding agent, you are obligated to deduct and remit this amount to the GRA. Failure to comply will result in a license revocation. You must ensure that you commence full tax deductions by August 15. Sanctions will apply if you fail to do so, added Gyamerah.

He reminded lottery operators of the need to modify their software to display the stake amount, potential winnings before taxation, the tax rate, the deducted tax, and potential winnings after taxation on the ticket and record these values for reporting purposes.

Stakeholders react to 10% witholding tax on lotteries, sports betting

Opposition Against the Betting Winnings Tax

The Opposition National Democratic Congress (NDC) has announced its intention to stage demonstrations against the 10% tax on betting winnings introduced by the ruling New Patriotic Party (NPP) government.

According to the party's youth wing, this taxation policy is burdensome and unfairly impacts the youth of the country as well as the broader betting industry.

George Opar Addo, the National Organizer of the NDC Youth, expressed the party's discontent with the tax in a press statement, stating, Our determination to safeguard the funds that young people secure through betting is unwavering. Through agitation, protests, advocacy, and civic engagement, we will ensure that our voices are heard, and we will demand that this corrupt Akufo-Addo/Bawumia government reverses its decision.

New Taxation Policy to Impact the Gambling Industry in Ghana

As a player with a big interest in the gambling industry, I find this development in Ghana's taxation policy to be of great significance. It reflects a global trend where governments are increasingly looking to regulate and tax the booming gambling sector.

My personal experience with gambling, particularly online betting and lottery games, has shown me that it's an industry that generates substantial revenue. The introduction of a 10% source tax on gross winnings is a bold move by the GRA to tap into this revenue stream and contribute to the country's finances.

However, it's important to note that such taxation policies can have both positive and negative effects. On the positive side, it can generate much-needed revenue for the government, which can be invested in public services and infrastructure. On the negative side, it may deter some players from participating in gambling activities, which could impact the industry's overall growth.

Additionally, the requirement for lottery operators to modify their software to accommodate tax-related information is a practical step to ensure compliance. It also highlights the importance of transparency in the industry.

In conclusion, Ghana's decision to implement a source tax on gambling winnings is a significant development that will shape the future of the gambling industry in the country. It remains to be seen how players and operators will adapt to this new taxation policy and how it will impact the overall landscape of gambling in Ghana.

Source: - We’ll protest and occupy govt buildings over 10% betting tax - NDC