The Ghana Revenue Authority (GRA) will, from today, Tuesday, August 15, 2023 begin a deduction of ten percent from all gross gaming winnings as withholding tax.
The tax, which affects winnings on betting and lottery, according to the GRA, will no longer be subject to the former 15 percent Value Added Tax (VAT) rate.
However, profits accrued, following each victory, will be subject to the ten percent withholding tax.
In line with an amendment to the Income Tax Act, 2023 (No. 2), Act 1094, gaming companies that disregard the new policy will suffer punitive measures, including fines and revocation of licenses, the Commissioner for the Domestic Tax Revenue Division at the GRA, Edward Gyamerah, told the media
“Come August 15, we expect that when you are making the payments, you will withhold 10 percent to the Ghana Revenue Authority (GRA). As you have been appointed as withholding agents, the obligation is on you to withhold.
“If you fail to do that, with the interactions we had with you and with the support of the gaming commission, you can be assured that your licenses will be withdrawn,” the Commissioner for the Domestic Tax Revenue Division at GRA cautioned.
In the last ten years, the betting sector in Ghana has experienced a tremendous expansion rate, encouraging several companies to establish operation centers across the country. The same can be said of the lottery and casinos.
The commanding expansion of the venture comes on the back of sharp divisions among Ghanaians on the pros and cons of investing in the sector.
Whereas some emphasise its negative impacts on youth, others maintain it is an avenue to generate funds, with the agreement that it is legal.
The GRA announced the taxing of pilot electronic commerce, gaming and bet taxes in April 2022, but its implementation met stiff opposition.
With local and foreign sports beginning new seasons, the GRA looks to mobilise some revenue from the implementation of the new policy.
As of last year, there were 33 sports betting companies duly registered with the Gaming Commission and eight legal casinos in the country, whose operations had increased over the years and thus needed to be taxed, the GRA has explained.
An association of Ghana bettors issued a statement last week to register their displeasure over the ten percent tax, describing it as a recipe for chaos.
They claim that due to the lack of jobs in the country, the youth, who do not want to engage in armed robbery and illegal activities for survival have resorted to betting and games of chance.
SWEAT FOR MONEY
However, the Majority Leader, Osei Kyei-Mensah-Bonsu, has justified the ten percent withholding tax on betting and lottery winnings.
He told Angel FM in Kumasi that he believes in sweating for money as opposed to playing the lottery and betting, arguing that it has contributed to a sense of laziness among the youth.
“I don’t believe in betting. I don’t believe in luck. I believe in hard work and sweating to get money. Let’s be serious. As for me, I’m against betting coming into the country. I don’t support it because it doesn’t encourage hard work.
“As an individual, I don’t engage in the lottery because I don’t believe in that. I don’t believe in luck. Work hard so God will bless it.”