Ghana Abolishes Tax on Gambling Winnings: Key Changes and Consequences
Ghana has decided to abolish the 10% tax on gambling winnings, a significant step towards improving the country’s financial situation and fulfilling the government’s pre-election promises.
This change, which came into effect on April 2, 2025, has sparked widespread reactions from both players and economists.
Tax Abolition on Winnings
The new law, signed by Ghana’s President John Dramani Mahama, abolishes the 10% tax introduced in 2023 as part of efforts to increase domestic revenue. Previously, the tax was automatically deducted from the amount of winnings, applying to all types of betting on sports events and lotteries.
The abolition of the tax was seen as a positive decision for citizens, especially after the possibility of increasing the tax rate to 50% was discussed. This step is part of the ruling party, the National Democratic Congress (NDC),’s pre-election program, aiming to improve citizens’ financial conditions and stimulate economic growth.
Reasons for Abolishing the Tax
The abolition of the tax is not only a fulfillment of pre-election promises but also part of a broader economic strategy. The authorities intend to reduce the tax burden on citizens and encourage participation in gambling, which many believe may lead to increased revenues in other sectors of the economy.
The main reason for the tax’s abolition was dissatisfaction from players and representatives of the gaming industry. During debates, it was noted that the tax on winnings created an additional burden on citizens’ wallets, leading to a decline in interest in betting.
However, some economists supported the tax’s introduction, arguing that it could serve as a tool to combat the growing gambling addiction among young people and help the government increase revenues.
Economic Consequences
Although the decision to abolish the tax was supported by many citizens, it has faced criticism from economists who warn that it may exacerbate the country’s financial problems.
In particular, the Institute of Economic Affairs (IEA) expressed concerns that the abolition of the tax could reduce government revenue, making it more difficult to implement other social and economic programs.
The tax on winnings was introduced in 2023 when Ghana’s economy was in a challenging situation. The tax was part of the government’s attempt to deal with rising costs of social programs and improve financial stability.
Additional Tax Changes
The abolition of the tax on winnings is not the only step taken by the government in the area of tax reform. In addition to this decision, the government of Ghana has also abolished several other taxes that had caused protests among the population. These include:
- Electronic Transfer Tax (E-Levy)
- Carbon Emissions Tax
These measures are aimed at easing the financial burden on citizens and stimulating economic growth.
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, stated that the abolition of the tax on winnings is just one step in a broader tax reform plan aimed at reducing tax rates and stimulating economic activity.
Risks and Prospects
Although the abolition of the tax on winnings creates more favorable conditions for players, there is a risk that this decision could have a negative impact on the country’s long-term financial stability.
It is important to consider that the abolition of the tax could lead to a shortfall in government revenue, making it more difficult to fund other needs.
However, in the long term, the government hopes that reducing the tax burden on citizens and businesses will help create a more stable and predictable economic environment, contributing to overall economic growth.