Beginning this week, Ghana imposed a 10% tax on all winnings from all lottery games. This new withholding tax will be deducted at the time of payment, and will apply to all pay-outs, regardless of amount. The Ghana Revenue Authority (GRA) has stated that this new tax is part of its efforts to boost government revenue.
In addition to the 10% tax on winnings, the GRA has clarified that if a game is cancelled and the player’s stake is returned, no withholding tax will be applied. Additionally, if the value of the pay-out is less than or equal to the amount staked, no withholding tax will be applied. This clarification from the GRA is intended to ensure that individuals are not taxed on their original stake, only on any additional winnings.
In order to help the GRA track the amount of tax collected from betting, games, and lottery winnings, the GRA has directed operators of these activities to make changes to various lottery software so that it displays the amount staked, the amount of winnings, and the amount of tax withheld during the pay-out process. This change will help the GRA track the tax revenue generated from these activities and ensure that it is being properly collected.
The introduction of the new tax has been a controversial topic, with many young Ghanaians criticizing the move as a tax on income that is already precarious. The GRA’s Commissioner, Edward Gyambrah, has responded by emphasizing the need to increase domestic tax revenue, noting that Ghana’s tax-to-GDP ratio is lower than that of other countries in the region. This debate highlights the tension between the need to raise revenue for government programs and the impact of new taxes on the most vulnerable members of society.
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