In a decisive step aimed at easing economic strains, five Members of Parliament of the National Democratic Congress have filed a private members bill to amend the Income Tax (Amendment) Act, 2023 (Act 1094), proposing the elimination of the withholding tax on lottery winnings.
Should this bill pass, the tax burden on winnings from gambling, including sports betting, gaming, and other games of chance, would be lifted, signifying a policy shift to reduce financial pressure on those participating in such activities.
The bill is supported by opposition NDC’s legislators, including Hon. Francis-Xavier Sosu (MP, Madina Constituency), Hon. Cassiel Ato Forson (MP, Ajumako Enyan Esiam), Hon. Isaac Adongo (MP, Bolgatanga Central), Hon. Teddy Safori Addi (MP, Ayensuano Constituency), and Hon. Alhaji Alhassan Suhyini (MP, Tamale North).
The five NDC’s MPs, in their motion, strongly argued that repealing this tax could provide economic relief, especially for the youth, who increasingly view sports betting and other gaming forms as alternative income sources amid a deteriorating economy.
“According to (Ofosu & Kotey, 2020), sports betting behaviour has a complementary rather than a substitutionary effect on investment behaviour, as individual sports betting behaviour can be moderated by influencing one’s financial circumstances. Another study by (Adjei & Mensah, 2023) revealed that students consider sports betting as not immoral as they have a positive perception of the effect of sports betting on their moral behaviours.
“However, the study recommended the need for Guidance and Counselling Units on Colleges of Education campuses running programs to inform students about exaggerated claims about the advantages of sports betting and the negative effects of same considering its tendency to be addictive”.
Hon. Francis-Xavier Sosu (Esq) MP, Madina Constituency; Hon. Cassiel Ato Forson MP, Ajumako Enyan Esiam; Hon. Isaac Adongo MP, Bolgatanga Central; Hon. Teddy Safori Addi MP, Ayensuano Constituency; and Hon. Alhaji Alhassan Sayibu Suhyini MP, Tamale North
For the MPs, the proposal to repeal the withholding tax aims to provide economic relief and remove what is perceived as an unnecessary burden on those who consider lottery winnings a significant financial boost.
Economic Hardship and Rising Inflation: The Case for Tax Reform
Explaining the significance of the bill, the National Democratic Congress lawmakers decried the severe economic hardships Ghanaians are facing.
They cited a World Bank report and highlighted that by December 2022, inflation had risen from 14% in January to 54%, pushing 850,000 citizens into poverty.
They also argued that although inflation has since declined to 21.5% in recent months, the cost of living remains steep, affecting essential areas like food, housing, health, and education.
“Currently, despite inflation standing at 21.5 per cent, representing a 1.1 per cent increase from the 20.4 per cent recorded in August, the cost of living of most average Ghanaians including the Youth continues to rise, as inflation for restaurants and accommodation services; alcoholic beverages; housing, water, electricity, gas and other fuels;
“education service; health service; and food and non-alcoholic beverages have recorded 27.9, 27.6, 26.4, 23.7, 22.3, and 22.1 per cent respectively, all above the overall annual inflation rate of 21.5 per cent. According to the World Bank, Ghana is ranked 6th in Africa with the highest food inflation as of July 2024”.
Hon. Francis-Xavier Sosu (Esq) MP, Madina Constituency; Hon. Cassiel Ato Forson MP, Ajumako Enyan Esiam; Hon. Isaac Adongo MP, Bolgatanga Central; Hon. Teddy Safori Addi MP, Ayensuano Constituency; and Hon. Alhaji Alhassan Sayibu Suhyini MP, Tamale North
This, they contended is in addition to the current 14 per cent unemployment rate, according to the Ghana Statistical Service (GSS), further citing a Mo Ibrahim Foundation report that 83 per cent of youth that enter the job market every year remain jobless.
They also argued that the situation has been exacerbated by the devastating impact of COVID-19 pushing an additional 30 million Africans into extreme poverty, and many more becoming more vulnerable.
National Security Concerns and the Need for Economic Stabilization
Proponents of the bill also pointed to national security concerns, asserting that a report from the Ministry of National Security suggests that economic challenges, unequal resource distribution, and marginalization could lead to public frustration and potential unrest.
For them, disillusioned citizens are more likely to resist societal norms and authority, exacerbating instability, pointing to the economic difficulties—intensified by the Domestic Debt Exchange Programme (DDEP) and global events such as the COVID-19 pandemic.
The legislators argued that repealing the withholding tax on lottery winnings could be one of several measures to relieve financial pressure, particularly for vulnerable youth.
“Furthermore, despite the imposition of the tax, a recent Afrobarometer survey published by the Center for Democratic Development (CDD) reveals that unemployment (41%) is the most frequently cited problem that Ghanaians want the government to address.
“Again, 7 in 10 Ghanaians revealed that they or someone in their household went without a cash income at least once during the previous year, with 81 percent of Ghanaians rating the government’s economic performance as overwhelmingly negative.”
Hon. Francis-Xavier Sosu (Esq) MP, Madina Constituency; Hon. Cassiel Ato Forson MP, Ajumako Enyan Esiam; Hon. Isaac Adongo MP, Bolgatanga Central; Hon. Teddy Safori Addi MP, Ayensuano Constituency; and Hon. Alhaji Alhassan Sayibu Suhyini MP, Tamale North
A Call for Immediate Action
The MPs advocating for the bill stressed the importance of immediate reforms to support Ghanaians through these economic challenges, stabilize finances, and create an environment conducive to growth and resilience.
They viewed this proposal as part of a broader initiative aimed at financial relief, enhancing savings and investments, and improving the overall standard of living.
The MPs also asserted that repealing the tax is a pragmatic step in addressing current economic difficulties and essential for achieving economic stability and security during this period of crisis.
READ ALSO: Pension Funds Lead Growth in Ghana’s Expanding Asset Management Industry
