The Ghana Revenue Authority has intimated that the new betting taxes being implemented are in line with global practice. The Revenue Authority has also said that these new taxes are in line with government’s goal to ensure that every income earner is brought into the tax net.
This message was resounded by the Lottery Tax Implementation Project Manager at GRA, Thomas Agosor who was interacting with the public live on the Eye on Port program.
He said the Authority deemed it necessary to discontinue charging bettors Value Added Tax (VAT) as it was practically flawed, thus replacement of those tax laws.
Mr. Agosor said “VAT is one of the efficient ways of mobilizing revenue and per the data I have reviewed, it contributes more than half of the total revenue we collect from the gaming sector so for government to replace with a new tax, it must be a tough decision.
For any tax policy that is introduced, compliance is key and we have noticed that because of the unique nature of the gaming operation, the industry has not been able to implement the VAT as per the law.”
“VAT had been operational in the sector since 2013 and that meant that any gaming operator that has set wager or stakes in any game of chance has to charge VAT and this had been in the books for a long time. The gaming operators were required to pay corporate tax on their net profit.
But we have reviewed the literature and realised that Ghana had been one of the few countries still taxing the industry like any other industry. The new taxes will have gaming operators pay tax on gross gaming revenue and a token withholding tax has been imposed on the winnings for players,” he continued.
Indeed, as recalled, the GRA from the 15th of August began the implementation of a 10% withholding tax exacted from gross winnings from all betting, gaming, lotto and other games of chance.
This means bettors will now pay a withholding tax of 10% of the profits accrued on wins, and this replaces the existing 15% VAT that is charged.
In addition to this, operators of gaming will pay a 20% tax on Gross Gaming Revenue to replace Corporate Income Tax.
According to the GRA a sum of 1.2 Billion Ghana Cedis is expected to
be collected during the initial stages of implementation.
Mr. Agosor stated that his outfit through its mystery shopping and other monitoring tactics and tools, will ensure that the new betting tax laws are complied with.
He revealed that stakeholders in the gaming sector have expressed mixed reactions with a majority of bettors excited.
“At the GRA we are not excited because we are losing so much, but industry is excited and players are happy. The only thing we are trying to manage is the tax on the winning and we are sure after these media engagements we will come to accept this over time.”
The Ghana Revenue Authority is therefore encouraging all betting operators to collaborate with government to ensure full compliance to avoid facing the full rigors of the law.
