The online betting industry in Ghana has been growing at a rate of knots in recent years, with Ghana quickly becoming one of the hotbeds of sports betting in sub-Saharan Africa.
The Ghanaian gambling market still lags behind regional superpowers South Africa, Nigeria and Kenya; but the West African nation is arguably the best of the rest in the region.
There are now so many online betting sites in Ghana, and over half of the adult population in the country is said to be actively involved in one gambling activity or the other.
Unfortunately, Ghanaian authorities have not quite been able to keep up with the increasing rate of betting in the country.
The Gaming Commission of Ghana is the body tasked with watching over the Ghanaian gambling industry. The Commission has done a decent enough job over the years, but they are having their hands full in keeping the industry under control.
Cases of underage gambling are said to still exist, while unlicensed betting sites are also still allegedly offering their services to Ghanaian players.
With the Ghanaian government proposing a new Electronic Tax Levy in the 2022 budget, some analysts have suggested that this may arrest the rising rate of online sports betting in the country.
But how true is this school of thought?
Finance Minister, Ken Ofori-Atta, while presenting the 2022 budget in November proposed a 1.75% levy on mobile money and other electronic transactions in Ghana.
“After considerable deliberations, Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the Electronic Transaction Levy or e-Levy”, the minister said.
According to Ofori-Atta, such electronic transactions, tagged as informal economy transactions, have been generating billions of cedis in recent years and possess great potential to increase Ghana’s tax revenue.
In 2020, the total value of electronic transactions in Ghana was estimated to be over GH¢500 billion, while the active mobile money users in Ghana increased by 16% between 2016 and 2019.
Recently, the President of the Ghana Association of Bankers, Madam Patricia Sappor, revealed that the value of mobile money transactions for the first four months of this year totalled GH¢301.1 billion whiles that of cheque transactions over the same period amounted to GH¢68.3 billion.
Madam Sappor said this when she was speaking during the 25th National Banking conference in Accra on the theme “the digital economy of Ghana the strategic role of the banking industry” on Thursday, November 18.
She said “The value of mobile money transactions for the first four months of this year totalled GH¢301.1billion whiles that of cheque transaction over the same period amounted to GH¢68.3 billion.
“If the trend continues which I believe will, the total value of mobile money transactions will surpass cheque transactions by far more than 389bn recorded for the whole year of 2020.”
Given that mobile money is by far the most used payment method on online betting sites in Ghana, betting stakeholders have been paying very close attention to the new tax developments.
If the e-levy becomes effective, it means that bettors will have to pay a 1.75% levy for every mobile money deposit they make into their betting site.
Unsurprisingly, many mobile money users have not taken kindly to the news. In fact, there were reports of a mass withdrawal of funds from mobile money accounts upon the announcement of the proposed levy.
It is very likely that the mobile money transactions will slow down for a while if the e-levy kicks into effect, but over time, things will go back to business as usual.
The mobile money industry in Ghana has gone too far to suffer a significant hit from the tax levy.
This is especially true for the online betting industry. Betting has become such an integral part of the Ghanaian lifestyle that it will take a lot more than a mobile money level for the industry to experience a noticeable decline!