Ghana raises concerns ahead of plans to scrap betting tax

The newly elected government in Ghana has raised concerns with plans to scrap the country’s 10% betting tax.

Ghana has released its new budget, including one proposal to remove the nation’s 10% betting tax. This has sparked concern from Ghana’s Institute of Economic Affairs (IEA), with worries that this could affect revenue generation and harm reduction.

First introduced in August 2023, the 10% tax on all betting earnings is automatically deducted when gambling winnings are awarded. It does not apply to canceled or failed bets.

The recently elected President John Mahama has laid out plans to scrap the tax as part of the new budget under a new government. It’s part of a wider push to push out ‘nuisance taxes’ in Ghana, alongside an e-levy and a Covid levy.

President Mahama has been met with some opposition to his plans, with the IEA chief among them. The group argues that the betting tax is vital to generating revenue for the nation and acting as a gambling deterrent. KPMG estimates that the removal of the three ‘nuisance’ taxes listed above could result in the loss of GHS 6.4bn ($410m) in government revenue, as reported by Gambling Insider.

There is some local support for scrapping the e-levy and the Covid-levy but the removal of the betting tax is proving unpopular in several groups outside of the IEA as well. In response, the IEA has proposed a counter initiative of a tax reduction to 5% from its current 10%, as opposed to a complete removal.

Betting taxes have proven successful as gambling deterrents in other areas, including Michigan in the US and Europe in places like the Netherlands. However, some argue that gambling taxes can increase gambling harm, as there is less money for gambling providers to put into harm reduction initiatives.

Featured image: Wikimedia Commons, licensed under CC BY-SA 4.0

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