Introduction of the Gaming Tax
The Ghana Revenue Authority (GRA) has rolled out a new gaming tax strategy with the ambitious goal of generating approximately GH¢400 million in revenue. This tax initiative centers around imposing a 10% levy on winnings derived from bets and lotteries, signifying a significant change in the taxation landscape for gaming activities.
Withholding at Source and Monthly Remittance
Under the new taxation framework, the responsibility for deducting and remitting the gaming tax lies with the gaming entities themselves. Acting as withholding agents on behalf of the Commissioner General of the GRA, these entities will be obligated to deduct the tax from winnings and remit it to the GRA on a monthly basis. The designated date for this remittance is the 15th day of each month.
Incorporating Gross Gaming Revenues
A noteworthy aspect of the new gaming tax approach is its incorporation of gross gaming revenues. By expanding the scope to include not only direct winnings but also gross revenues generated by gaming entities, the tax seeks to provide a comprehensive and robust revenue stream for the government. This comprehensive strategy is projected to contribute significantly to achieving the targeted revenue goal of over GH¢400 million.
Effective Date and Implications for VAT
Commencing on August 15, 2023, the new policy mandates a 10% withholding tax on gross gaming winnings. Notably, this implementation comes with a change in the Value Added Tax (VAT) landscape. The existing 15% VAT rate that was previously applied to each stake will no longer be levied under this revised system.
Alignment with Legal Framework
The introduction of the gaming tax aligns with an amendment made to the Income Tax Act 2023 (No.2), Act 1094. This legislative alignment underscores the GRA’s commitment to adapting tax policies in accordance with evolving economic circumstances.
Ensuring Compliance and Potential Sanctions
To ensure compliance with the new gaming tax policy, the GRA has emphasized that gaming companies must adhere to the withholding and remittance requirements. Non-compliance with these regulations could result in significant consequences, including the possibility of sanctions such as the withdrawal of gaming licenses.
This move by the GRA reflects a proactive effort to optimize revenue collection and streamline taxation strategies within the dynamic gaming sector.