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Ghana’s need to address its mounting public debt has put gambling in the crosshairs, with tax hikes on the industry one hurdle away from being introduced.
Changes to income tax rules would see a 10 percent tax on winnings from gambling introduced. Lottery winnings will also be subject to this, with some slightly different details.
The country’s parliament approved four bills on March 31, which were: Excise Duty (Amendment) Bill, 2022; Income Tax (Amendment) (No.2) Bill, 2022; the Growth and Sustainability Levy Bill, 2022; and the Ghana Revenue Authority (Amendment) Bill, 2022.
Voting on the controversial bills was incredibly close, passing with a 137-136 majority decision.
All of the changes are now awaiting the President’s approval before being assented to, which is likely a formality.
Ghana has $58bn in debt, $5.5bn of which is owed to foreign governments and their state banks.
These plans to increase government revenue are key to encouraging the International Monetary Fund (IMF) to provide a much-needed $3bn bailout.
Speaking to parliament in February, Finance Minister Ken Ofori-Atta provided an update on the government’s progress in completing its much-needed debt restructuring measures.
Ofori-Atta called on the lawmakers to pass outstanding revenue bills, which he said would help facilitate an effective budget implementation and increase the country’s tax-to-GDP ratio from less than 13 percent to the sub-Saharan average of 18 percent.
The Minister said this move is crucial to bolster Ghana's financial position and make it more resilient to the economic impacts of the COVID-19 pandemic.
Earlier this year, Ghana introduced three other tax-related legal changes as part of its plans, which have already received some backlash in the local media for putting more financial burdens on people.
The Electronic Transfer Levy (Amendment) Act, the Revenue Administration (Amendment) Act, and the Value Added Tax (VAT), (Amendment) No. 2 Act, which increased the VAT rate from 12.5 percent to 15 percent.
Pressure on companies and consumers is also exacerbated by a very high inflation rate, which was 52.8 percent as of February, down from 53.6 percent in January.
Last year, the Ghana Revenue Authority confirmed to VIXIO GamblingCompliance the introduction of a new digital scheme to collect taxes from the gambling industry to prevent leakage. However, data on its impact is not available yet.
