All betting, lottery wins to attract 10% tax from August 15, 2023

Wins from lottery games, casinos and marketing promotional raffles will now attract a 10 per cent tax with effect from August 15, 2023.

This means that gross winnings from all betting, gaming, lotto and other games of chance will be subjected to a 10 per cent withholding tax which will be considered as a final tax. 

In addition, the Gross Gaming Revenue (GGR), which is the amount generated from all stakes less the winnings, will also be subjected to 20 per cent withholding tax.

The Ghana Revenue Authority (GRA) is hoping to mobilise about GH¢1.2 billion in the initial stages of implementation of the taxation of lottery operators.

Revenue mobilisation from the taxes is expected to increase to about GH¢3 billion after the initial stages.

The latest development follows the passage of the Income Tax (Amendment) Act, 2023 (Act 1094), which subjects all lottery wins to the withholding tax, to be deducted by the lottery operators and paid to the GRA. 

In line with the law, the withholding tax deduction applies to winnings paid by private lotto operators of sports betting, casino operators, route operations (slot machines), marketing promotions, national lotto betting, remote interactive games operators, and other games of chance. 

The Commissioner of the Domestic Tax Revenue Division of the GRA, Edward Gyambrah, made this known during an interaction with news editors of selected media houses in Accra last Monday. 

The event, which was to explain policy initiatives and bring the media to speed on initiatives being undertaken by the GRA, also attracted the leadership of the Ghana Association of Sport Betting Operators. 

Sanctions 

Mr Gyambrah said all lottery operators were expected to comply with the law by withholding 10 per cent of the tax on gross winnings and make payments to the Authority.

For effective implementation and administration of the Act, all lottery operators are required to make changes to their software to display the bet or stake amount, winnings and tax withheld and store the values for reporting purposes.

He said some operators in the industry, including casinos, route operations, and marketing promotions commenced implementation of the policy on June 1, this year, while sports betting, private lotto operations and others were expected to start from Tuesday.

Operators who fail to comply, Mr Gyambrah said, would have their licences withdrawn with the support of the Gaming Commission of Ghana.

He said the move was part of initiatives by the GRA, which is responsible for revenue mobilisation, to boost domestic revenue generation.

“It was important to boost domestic tax revenue mobilisation as Ghana's total tax to Gross Domestic Product (GDP) is very low compared to that of others in the sub-region,” Mr Gyambrah stated.

So far, he added, the authority had introduced a number of initiatives, including the Electronic Value Added Tax (VAT), Electronic Tax Clearance Certificate, Upfront Payment on imported goods, excise tax stamp, resumption of the payment of Vehicle Income Tax, among others. 

Negative GGR

The Chairman of the GRA Gaming Committee, Thomas T. K. Agorsor, explained that gross winnings from lottery for the purpose of calculating withholding tax was the payout at the end of each betting, gaming and any game of chance less the amount of the stake or bet and the winnings.

Where a game is cancelled and the player’s stake is returned or where the value of the payout is less or equal to the value of the stake, withholding tax would not apply.

Also, where a negative gross gaming revenue is recorded in a particular month, he said, the operator was allowed to carry forward the negative in the subsequent month by deducting it from a positive gross gaming revenue recorded. 

Additionally, he said, an operator would not be liable to tax on gross gaming revenue for the month in which the negative was recorded. 

Filing, payment 

Mr Agorsor said the tax on the GGR was due for payment at the same time as the due date for filing the return of the 15th day of the month following the month in which the GGR transaction return related.

"At the end of each year, all persons engaged in lottery operation are required to file annual gross gaming revenue tax returns and pay any tax outstanding not later than four months after the end of the basis period in accordance with the Act,” he stated.

In the event where GRA ascertains that the amount of GGR tax payment made for the year is less than the monthly GGR tax liability for that year, GRA would issue an assessment notice, including interest and penalties as applicable, on the difference to the lottery operator for payment. 

On the other hand, Mr Agorsor said, where the payment made by the lottery operator for the year exceeded the GGR tax liability due, the operator would be allowed to take credit on the excess payment in the month following the determination.

"A lottery operator who has no withholding tax payment for a particular month shall file a “nil” return with the Commissioner-General within 15 days after the end of the month in which the tax relates", the GRA Gaming Committee chairman explained. 

The Commissioner-General, Mr Agorsor said, might, for the purpose of assessing the correct taxes from lottery operation, establish a revenue monitoring system to verify the actual revenue that accrues to lottery operators for the purpose of computing taxes due the government under the Act.

That notwithstanding, the lottery operator could be given a physical assessment of its infrastructure or system, he said.