The Gaming Industry In Ghana: The Introduction Of New Taxes (10% Withholding Tax On Winnings And Gross Gaming Revenue (GGR) On Income From Lottery Takes Off In Ghana)

The introduction of new taxes on the gaming industry in Ghana, as outlined in the Income Tax (Amendment) Act 2023 (Act 1094), involves the imposition of a withholding tax on winnings and a tax on Gross Gaming Revenue (GGR). Here's a summary of the key points:

1. Background
   
   • Gambling is legal for adults but illegal for minors in Ghana.
   • The Gaming Act, 2006 (Act 721), prohibits persons responsible for gambling machines from allowing children (persons under 18 years) to use such machines.
2. Growth of the Gaming Industry
   
   • Ghana's gaming industry has experienced significant growth, including casinos, sports betting, and other games of chance.
   • The government aims to introduce new taxes to boost internal revenue mobilization.
3. New Tax Regime
   
   • The Income Tax (Amendment) Act 2023 (Act 1094) introduces a withholding tax of 10% on all winnings.
   • Winnings from betting, lottery, and games of chance are subject to the withholding tax at the point of payout.
   • Income from lottery operations is subject to a tax rate of 20% on Gross Gaming Revenue (GGR).
4. Definitions
   
   • Gross Gaming Revenue (GGR): The total amount staked or wagered, less prizes or winnings paid or payable.
   • Gains and Profits: The total amount staked or wagered for a person engaged in a lottery operation.
5. Implementation Guidelines
   
   1. Gross Gaming Revenue Tax
      
      • All lottery operators (excluding the National Lottery Authority) must pay the GGR tax to the Ghana Revenue Authority (GRA).
      • Monthly returns and tax payments are due by the 15th day of the month following the GGR transaction.
      • Annual GGR tax returns must be filed at the end of each year.
   2. Withholding Tax on Winnings
      
      • Lottery operators are required to withhold 10% tax from the final gross payout to players/punters.
      • Returns for withholding tax on gross winnings are due by the 15th day of the month following the transaction.
      • Sports betting companies, National Lottery Authority, and private lotto operators begin withholding tax from July 1, 2023.
6. Nil Returns
   
   • Operators with no withholding tax obligation for a particular month must file a "Nil" return by the 15th day of the following month.
7. Legal Representation
   
   • Entities in the gaming industry are advised to have legal representation with expertise in gaming law to navigate the regulatory regime.
8. Compliance
   
   • Lottery operators should engage industry experts to ensure compliance with the new tax regime.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.