OPINION: Critiquing Ghana’s Betting Tax repeal
President John Dramani Mahama signed into law several key legislations, including the repeal of the 10% withholding tax on betting winnings, along with other levies like the E-Levy and Emissions Tax.
On Wednesday, 2nd April 2025, President John Dramani Mahama signed into law several key legislations, including the repeal of the 10% withholding tax on betting winnings, along with other levies like the E-Levy and Emissions Tax. While I have my reservations about the others, my primary concern at this moment is the betting tax repeal. I should have written earlier in the immediate aftermath of the repeal, but now is the time I can.
The National Democratic Congress (NDC) government’s decision to abolish the 10% withholding tax on betting and gaming at the moment when Ghana is facing one of its most severe fiscal crises in recent memory, culminating in an International Monetary Fund (IMF) bailout, is not just a misstep but emblematic of a deeper and troubling pattern where political expediency eclipses economic rationality. Decisions like this could potentially turn our economic recovery into a distant mirage. That is why it is proper for well meaning citizens to question government’s priorities.
Let me first offer a brief account of Ghana’s dire situation. Ghana’s public finances are on life support. Debt servicing now consumes over 50% of total government revenues. Inflation remains stubbornly high, and public debt exceeds 72% of GDP with limited fiscal space. These realities were key factors in the IMF’s approval of a $3 billion bailout program, which emphasized the urgent need for broadening the domestic tax base and enforcing fiscal discipline.
Against this backdrop, scrapping an established tax, even a modest one like the betting tax, flies in the face of this urgent fiscal mandate. Per reports, the betting tax generated GH¢50 million annually, a figure dismissed by the Minister of Finance, Dr. Cassiel Ato Forson, as insignificant. Let me grant him that, for the sake of argument. Yet in a fiscal environment where every cedi matters, such arguments are disingenuous. No revenue stream should be written off lightly no matter how modest in the current fiscal climate. Ghana’s domestic revenue-to-GDP ratio remains low compared to African peers like Kenya and Rwanda, a critical weakness that demands urgent attention, not further erosion. Interestingly, those countries, recognizing the long-term cost of fiscal slippage, have moved not to abolish their taxes, but expanded and ring-fence them.
Kenya, for instance, increased its betting tax to 15% on betting revenue and reinstated a 20% withholding tax on winnings in 2024, balancing revenue generation with social responsibility. Closer to home, South Africa maintains a 6.5% tax on gross gaming revenue along with a 15% VAT on betting transactions. These measures not only generate funds but also regulate gambling’s social impacts, ensuring that difficult choices contribute to national stability. Ghana’s decision to abolish the betting tax, by contrast, abandons both revenue and regulation, exposing the nation to fiscal and social vulnerabilities.
It is uncontested that the betting tax repeal fulfills a 2024 campaign promise made by the NDC, aimed at capturing youthful voter enthusiasm. Labeling the tax as a “nuisance tax,” the NDC capitalized on public sentiment at the expense of economic rationality. Yet public finances are not campaign props, they are the backbone of national survival. Policy-making during crises must be driven by realism, not romanticism. True leadership demands hard, sometimes unpopular decisions. The betting tax may have been politically unpopular, but its removal prioritizes short-term electoral gains over long-term fiscal stability. This decision reflects a troubling trend where political promises outweigh the need for responsible governance. When governments choose populism over prudence, the consequences fall disproportionately on the nation’s most vulnerable.
Moreover, the decision carries significant social consequences. Gambling, particularly sports betting, has exploded among Ghana’s unemployed youth and its impacts are anything but benign. While viewed as an avenue for potential earnings, excessive gambling exacerbates financial ruin, family breakdowns, and even crime—a social malaise that disproportionately affects lower-income citizens (I recently heard of unimaginable betting escapades that end in tragedies). Thus, the betting tax was not just a fiscal instrument but a behavioral nudge against overindulgence. Its removal risks promoting reckless gambling and worsening societal issues.
Finally, the optics of this decision could not be worse. Development partners and investors expect consistency from nations under IMF programs. Removing a logical and progressive tax undermines Ghana’s credibility and signals reluctance to make the necessary hard choices for recovery.
What should have been a smarter policy option? A more visionary government would have used the betting tax creatively by earmarking its revenues for youth employment programs, skills development, or financial literacy initiatives. Imagine a Ghana where the very act of gambling feeds a fund that helps young people escape the cycle of betting addiction. This opportunity, however, has been sacrificed on the altar of political calculations.
In conclusion, abolishing the betting tax is a textbook example of politics sabotaging economic prudence. It is a misstep that compromises fiscal recovery, worsens social risks, and jeopardizes Ghana’s fiscal future. In the casino of governance, this was a reckless bet and the stakes are nothing less than the nation’s future.
Author: Mark Awe Tachega, PhD. The writer is an Academic and Researcher with particular interest in economic policy in the Global South.
(I remember: Ghanaians are called to be citizens, not spectators. That is what I am trying to do here.)
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