The Ghana Revenue Authority (GRA) has disclosed in a directive to all lotto and betting companies in the country to start withholding 10 percent of all winnings as taxes starting from 15^th of this month August, 2023, failure to comply will led to the revocation of operating licenses.

The new tax will be applied to profits gained after each win, while the existing 15% Value Added Tax (VAT) on stakes will be discontinued.

“Starting from August 15, 2023, the Ghana Revenue Authority (GRA) is set to initiate a 10% withholding tax on all gross gaming winnings,” according to an official announcement. This alteration is in accordance with an amendment to the Income Tax Act 2023 (No.2), specifically Act 1094.

During a media interaction, Mr Edward Gyamerah, the Commissioner for the Domestic Tax Revenue Division at GRA, emphasised that gaming companies failing to comply with this policy will encounter penalties, including the revocation of their licences.

Mr Gyamerah directed saying, “As of August 15, it is expected that you will remit 10 per cent to the Ghana Revenue Authority (GRA) during payments. Since you have been designated as withholding agents, the responsibility lies with you to carry out the withholding”.

Mr Gyamerah further warned that “Failure to do so, after our discussions with you and in conjunction with the Gaming Commission, will result in the assured withdrawal of your licences”.

New Excise Duties On Beverages

Furthermore, as part of the Income Tax Act amendment, the GRA introduced new excise duties on beverages.

Mr Nelson Bright Atsu, Head of the Compliance Excise Unit at GRA, detailed that fruit juices, grapes, and unfermented vegetable juices without added spirits or sugar will now incur a 20% excise duty.

Additionally, the excise duty for other beverages has been raised from 17.5% to 20%. Mr. Atsu also indicated that beverage companies utilising a higher proportion of locally-sourced raw materials will qualify for excise duty payment rebates.

These changes in the form of a new withholding tax on gaming winnings and revised excise duties on beverages align with the GRA’s overarching objective to enhance revenue generation in Ghana, the statement said.

The new tax has been widely criticised by young Ghanaians on social media, many of whom are involved in betting. The betting industry in Ghana has seen tremendous growth in the last decade, leading to many betting companies setting up shops in the country.

In recent years, sports betting has often divided opinion among Ghanaians, with some quarters highlighting its effects on the youth. Others also believe betting is legal and therefore, cannot be described as a bad practice when no laws are broken. “Taxation is crucial for government revenue, but the 10% tax on all bets may harm Ghana’s youth who already face economic challenges. Many young people rely on betting due to the lack of job opportunities, taking 10% from our betting earnings seems unfair,” one of the critics said on twitter.

Meanwhile, betting companies operating in the country will also be subjected to a 20% tax on their revenue. These measures are part of the government’s efforts to increase domestic tax revenue, which is crucial to successful outcome of the International Monetary Fund (IMF) programme.

Ghana, once described as Africa’s shining star, has been hit by a severe economic crisis. Despite having the world’s fastest-growing economy in 2019, and being a major cocoa and gold exporter, Ghana is currently battling its worst financial crisis in decades.