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The National Lottery Authority (NLA) has set plans to regularize the private lotto operators to increase its revenue generation from 35million to 250million cedis annually to government.
The Director-General of NLA, Kofi Osei-Ameyaw, said this in an interview with Business Week during a recent stakeholders forum attended by lotto operators, Writers and Lotto Marketing Companies (LMCs) in Accra to discuss challenges facing the industry.
He indicated that the Authority is undertaking steps to regularize the industry through a Public Private Partnership within the framework of the Lotto Act 2006 (Act 722) where a certain fee would be generated for banker-to-banker operators who apply for license to operate a lotto business.
Mr. Osei-Ameyaw noted that the formalization of the banker-to-banker operators will begin in phases starting from the Greater Accra Region, Ashanti, Eastern and Western region in that order.
“We are going to license a certain number of them within regions. We have 10 regions, in Greater Accra region we will be looking for 30-50 operators on the top. If each one pays a million cedis a year that gives us about 30-50million cedis from the 50 operators. If we don’t get the total number and some want to operate and pay we will give them the license and they will then employ the writers underneath them and they will be the ones writing. Once we are able to do that they can go ahead as licensed banker-to-banker operators who are not using the Point of Sale (POS) machines.
“So if Greater Accra we can do 30 to 50 million cedis, we will do similar in Ashanti region, Eastern Region, Western region. For Volta region, we will step it down a bit as well as Upper East, Upper West and Northern Region,” he stated.
He noted that the Authority is partnering them to develop modalities for an agreement to be signed on how much fees should be charged for licensing a banker-to-banker operator.
Banker-to-banker collapsing their business
Mr. Kofi Osei-Ameyaw indicated that the banker-to-banker operators are killing the NLA’s business with payment of commissions which is a little above what LMCs are paid.
According to him, government is losing revenue as a result of the two groups operating differently which allow the banker-to-banker to operate without any taxes and other with a tax burden which actually belongs to government.
“They pay their people 35percent and we pay our people 20percent commission and again take tax off the 20percent on their commission. So people are shifting to the banker-to-banker and revenue that would have gone to government is being moved away. So once you stop the taxes it will attract more people to come in.
“Further to that, if you get a win through Lotto Marketing Company (LMC) which belongs to government and you are going to claim your money, you will pay tax on that win. So it is not allowing people to rather shift to the illegal banker-to-banker where you just get your full money without any tax,” he intimated.
Mr. Osei-Ameyaw posited that the removal of taxes will give the industry players a level playing field to generate the needed revenue to government for national development.
He added that the removal of taxes on the commission on wins will also encourage more people to patronize the lotto business to grow and become more viable in the country.
According to him, failure to register within three months of operation will lead to arrest and prosecution by their lotto police and courts.
Removal of Taxes on Commission
The Director General emphasized that government has promised to provide a tax relief for a period of 2years to monitor and study progress of lotto businesses in the industry.
“We have had discussions with the Ministry of Finance. I cannot scrap taxes. They have to take it to Parliament because what we are arguing is that once we have a sunset clause, moratorium for two years is needed to see whether when we take those taxes out we can expand the revenue base and put more money into the consolidated fund.
“They have agreed they will look into that and push it to Parliament and once Parliament agrees that we should scrap taxes on commissions of the agents which the banker-to-banker are not paying anything,” he stressed.
Increment of Commission
Mr. Kofi Osei-Ameyaw announced the Authority’s plan to increase the commission paid to operators from 20 to 25percent to allow competition.
“We are interested in increasing your commission and then also we have made representation to the Ministry of Finance to take away the taxes on your commission,” he stated.
Source: Abubakari Seidu Ajarfor