Scrapping Betting Tax Would Be A Grave Mistake – Dr. John Kwakye Cautions Mahama

Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), has issued a stern warning to President John Dramani Mahama regarding the proposed removal of the 10% withholding tax on sports betting winnings. Dr. Kwakye cautions that eliminating this tax could have detrimental effects on both the nation’s economy and its youth.

The 10% withholding tax on betting winnings was implemented in August 2023 following the passage of the Income Tax (Amendment) Act, 2023 (Act 1094). This measure was introduced to generate revenue and address concerns about the rising popularity of betting among the youth.

During his campaign, President Mahama pledged to abolish this tax, a promise that has been met with criticism from various quarters. Dr. Kwakye argues that removing the tax could lead to increased gambling activities among young people, potentially resulting in addiction and financial instability. He emphasizes that the tax serves as both a revenue-generating tool and a deterrent against excessive betting.

Supporting this perspective, Professor Stephen Adei, former Rector of the Ghana Institute of Management and Public Administration (GIMPA), has also advised against scrapping the betting tax. He suggests that instead of removing the tax entirely, the government should consider revising the rate to balance revenue generation with social responsibility.

Despite these warnings, President Mahama remains committed to his campaign promise, asserting that the tax is punitive and disproportionately affects the youth. He has indicated that his administration will explore alternative revenue sources to offset the potential loss from abolishing the tax.

As the debate continues, stakeholders are calling for a comprehensive assessment of the potential economic and social impacts of removing the betting tax. The government is urged to consider policies that promote responsible betting while safeguarding the nation’s fiscal health.