In a bid to boost domestic tax revenue and address economic challenges, Ghana has introduced a new measure that will see a 10% tax applied to betting and lottery winnings. The Ghana Revenue Authority (GRA) announced that this withholding tax will be automatically deducted at the point of pay-out for all betting, games, and lottery wins.
Effective as of Tuesday, the tax implementation aims to enhance the country’s tax-to-GDP ratio, which is comparatively low within the sub-region. Edward Gyambrah, Commissioner of the GRA, emphasized the importance of this tax initiative in mobilizing domestic resources to drive the country back towards growth.
To ensure effective monitoring, lottery operators are required to update their software to display the details of the amount staked, the winnings, and the tax withheld during pay-out. However, non-compliance with the new regulations has serious consequences, as revenue authorities have warned that licenses for sports betting firms, lottery operators, casinos, slot machine operators, and marketing promoters will be revoked.
While the government expects the tax to contribute significantly to the country’s revenue, the new measure has faced criticism from the younger generation in Ghana. They argue that betting and lottery winnings often serve as alternative income sources for the unemployed. Some have expressed concerns that this tax could further exacerbate the high levels of unemployment already facing the country.
Ghana recently entered into a three-year International Monetary Fund (IMF) bailout program in May to address its prolonged economic challenges. As part of the efforts to revive the economy, economic managers have urged the expansion of the tax base and the mobilization of domestic resources. This move is seen as a step towards achieving these goals.
The introduction of this tax comes at a time when the popularity of sports betting and lottery games is on the rise in Ghana. The industry has seen significant growth in recent years, attracting a large number of participants looking to win big prizes. The tax on winnings is seen as a way to tap into this thriving sector and generate additional revenue for the country.
While the tax applies to all betting and lottery winnings, there are exceptions in cases where a game is cancelled and the player’s initial stake is refunded, or if the pay-out amount is equal to or less than the staked amount. This ensures that individuals do not face unnecessary taxation on their bets or in situations where there is no actual gain.
The implementation of this tax on betting and lottery winnings aligns with the global trend of governments looking to regulate and tax the gambling industry. Many countries have recognized the potential revenue generated by this sector and have introduced similar measures to ensure a fair share of the profits goes to the government.
As Ghana moves forward with this new tax initiative, it remains to be seen how it will impact the country’s economy and the gambling industry. The government hopes that the additional revenue generated will contribute to the ongoing efforts to revive the economy and promote sustainable growth. Meanwhile, critics argue that it may have unintended consequences for the unemployed and further widen the gap between the rich and the poor. Time will tell how the implementation of this tax will shape Ghana’s economic landscape.
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