GRA Implements 10% Withholding Tax on Lotto Winnings, Effective January 1, 2024

In a public notice issued yesterday, the Ghana Revenue Authority (GRA) announced the initiation of a 10% withholding tax on gross winnings from all forms of lotteries, including lotto, betting, gaming, and other chance-based games.

The Withholding Tax, introduced by the Income Tax (Amendment) Act, 2023 (Act 1094), has been in effect since its enactment. The National Lottery Authority (NLA) and Private Lotto Operators (PLOS) were granted a six-month extension, expiring at the end of December 2023, to prepare for the implementation of this tax.

Hence, the GRA has directed the NLA and PLOs to commence the application of the 10% Withholding Tax on Lotto Gross Winnings starting January 1, 2024.

Emphasizing the mandatory nature of tax law compliance, the GRA warned that failure to adhere to the regulations constitutes an offense under Section 78 of the Revenue Administration Act, 2016 (Act 915). Operators not in compliance will face sanctions.

All stakeholders, including patrons, players, punters, operators, and tax consultants, are urged to take note of this directive.

For assistance, patrons/players/punters can contact GRA toll-free at 0800-100-110 or via WhatsApp at 055 299 0000 / 020 063 1664. Operators can reach the GRA Gaming Support Team at gamingsupport@gra.gov.gh.

Background:

The implementation of a 10% withholding tax on all gross gaming winnings by the GRA commenced on August 15, 2023. This tax replaces the previous 15% Value Added Tax (VAT) on each stake and aligns with the amendment to the Income Tax Act 2023 (No.2), Act 1094.

Edward Gyamerah, Commissioner for the Domestic Tax Revenue Division at the GRA, clarified that gaming companies failing to comply with the new policy would face sanctions, including the withdrawal of their licenses. Despite its implementation, the tax has faced criticism from punters.