The government pf Ghana has introduced two new taxes: a 10% tax on all betting, games and lottery wins and a levy on every ride-hailing trip.
Betting Tax
The new 10% tax on betting and lottery winnings has been met with criticism by young Ghanaians on social media who are involved in betting. The betting industry in Ghana has seen significant growth in the past decade, leading to many betting companies operating in the country. Sports betting has been a topic of controversy among Ghanaians, with some believing it has negative effects on the youth while others see it as a legal activity.
The new tax means that 10% of all winnings by punters will go to the government of Ghana.
Ride-Hailing Tax And Regulations
The “Digital Transport Guidelines” announced by Ghana’s Driver and Vehicle Licensing Authority (DVLA) will impose a new levy on every ride-hailing trip. The vehicle licensing agency plans to force ride-hailing companies to share real-time trip and customer data with it.
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The new rule means that Uber, Bolt, Yango, inDrive, and Black Ride — the five ride-hailing firms which operate in Ghana — will impose an additional charge on passengers who use their platforms. The new charge may amount to double taxation, especially for passengers who use mobile money payments. This tax is in addition to the unpopular e-Levy, a 1.5% tax on all electronic and mobile payments above 100 cedis, which was introduced in May 2022 and reduced to 1% in January 2023.
The DVLA has set the fee at GH¢1 per trip, subject to periodic review. It is unclear if Ghanaian law permits administrative bodies to impose charges on consumers like the DVLA has. The new per-trip levy will cover annual license fees paid by drivers, digital transport licenses, fees for an information search system, and the costs of maintaining the entire DVLA database.
The new guidelines mandate the registration of all private vehicles intended for commercial purposes with the Driver and Vehicle Licensing Authority. Registered vehicles would then receive a DVLA sticker which they are required to fix onto the front windscreen of their vehicles. The DVLA also mandates ride-hailing companies to verify their passengers’ identities using Ghana’s biometric digital ID, the Ghana card.
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Having a data protection certificate is a requirement for ride-hailing companies operating in Ghana, and the new guidelines acknowledge this. However, the new rules from the agency will force ride-hailing companies to share business and personal customer information with the agency for every trip completed. Data the agency wants to collect includes passenger information, driver name, departure and arrival time stamps, departure and arrival GPS coordinates, trip distance, date of transaction, license number of driver, vehicle registration number, and driver, vehicle and passenger ratings.
The data will enable the DVLA to collect the revenue from its new tax net, which is supposed to be remitted monthly by ride-hailing companies. The new rules may open fronts for data abuse and privacy violations.
Ghana is battling inflationary headwinds that have eroded the buying power of the cedi by more than 50% in the last year alone. In January, inflation rose to 54.1%, a 22-year high. The new taxes on betting and ride-hailing may further exacerbate the cost of moving people and goods across Ghana, contributing to rising prices. Taxes on services like ride-hailing are not uncommon, and these costs often get passed on to passengers. Paying GH¢1 extra for every Uber/Bolt trip may not be much, but for Ghanaians feeling the pinch of a flagging economy.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard