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Ghana has officially scrapped the 10% withholding tax on lottery winnings less than two years after it was introduced. While this move stirred excitement from the gaming sector, it has sparked concern among public health experts. The levy, known as the “Betting Tax,” was first implemented under former President Nana Akufo-Addo to boost revenue and regulate the booming sector.
Under the leadership of President John Mahama, the government has now reversed course, citing rising economic pressures and the need to ease the financial burden on everyday Ghanaians.
A Win for the Industry and Players
The announcement came during the reading of the national budget, where Finance Minister Dr. Cassiel Ato Forson declared:
“We will abolish the 10% withholding tax (WHT) on winnings from the lottery.”
The news was met with immediate relief from the industry, which has endured a 15% drop in revenue between 2023 and 2024, largely due to the unpopular tax. Companies like LottoHub were forced to lay off 500 employees after the tax’s implementation. But with recent news, they might be set for a rebound.
Operators wasted no time seizing the moment, rolling out promotional campaigns and betting bonuses within hours of the announcement. This signals a major comeback for the sector that had been struggling under regulatory pressure.
The Economics Behind the Repeal
Ghana’s government framed the repeal as part of a broader economic recovery plan. With over 70% of adults reportedly active bettors, the Finance Ministry argued that this tax disproportionately impacted households already stretched by inflation and economic instability.
“This is about putting more disposable income back into the pockets of citizens. We must stimulate consumption if we hope to see sustained recovery, ” Dr. Cassiel Ato Forson stated.
Despite its popularity, the betting tax generated a relatively small share of national revenue. In 2023, the gaming sector contributed GH¢78 million, accounting for a modest 0.042–0.053% of overall tax income. Therefore, this reversal is unlikely to shift Ghana’s fiscal landscape significantly.
Public Health Concerns Loom Large
While industry stakeholders and consumers welcome the regulatory change, critics have warned it might have a steep social cost. Experts estimate that gambling addiction affects roughly 4% of Ghana’s adult population, a number that could rise without proper measures in place.
What’s more worrying for public health advocates is that there were no investments in mental health services or addiction prevention programs alongside the repeal.
“This is a missed opportunity to balance economic stimulus with public safety,” said a spokesperson from the Ghana Mental Health Alliance. “The removal of the tax, without safeguards, opens the door for more vulnerable people to fall into harmful patterns of gambling.”
The Institute of Economic Affairs expressed more concerns, noting that the tax had generated up to GHS 6.4 billion annually. As other tax cuts stack up, Ghana’s tight fiscal position could be in further jeopardy if the government doesn’t secure alternative revenue streams.
A Local Approach To A Global Dilemma
Ghana’s decision is not an isolated case. Governments of various countries like Kenya and the UK have struggled to strike a balance between the public benefits of gambling taxes and developing a competitive market.
However, it’s clear that the nation’s approach combines economic activity with appeasing public sentiment, and maintaining a strong fiscal position. With time, citizens will see how this move impacts the economy and the rise of gambling addiction. But for now, bettors and operators can enjoy tax-free winnings.
Source: E-play Africa
