From January 1, 2026, Togo will begin a new chapter in its domestic revenue mobilisation efforts with the introduction of a withholding tax on large lottery winnings. The Togolese National Lottery, widely known as LONATO, has confirmed that any prize valued at 500,000 FCFA or more will now attract a 5 percent tax deduction, paid directly to the Togolese Revenue Authority, OTR. This policy marks a significant step in aligning gaming revenues with national fiscal priorities while maintaining transparency and efficiency in collections.
Importantly, the tax will apply automatically at the point of payment. This means winners will no longer need to worry about post-payment tax obligations or separate filings. For instance, a bettor who wins exactly 500,000 FCFA will receive 475,000 FCFA after a 25,000 FCFA deduction. This approach simplifies compliance, reduces administrative bottlenecks, and strengthens confidence in the system.
Beyond its technical details, the policy reflects a broader shift in Togo’s public finance strategy. In recent years, authorities have focused on expanding the tax base without placing additional pressure on ordinary incomes or essential goods. Consequently, lottery winnings, especially high-value prizes, now fall within a category seen as fair and socially acceptable for targeted taxation. The logic is straightforward. Gaming income represents discretionary earnings, and taxing a small portion helps support public services without undermining livelihoods.
Moreover, the automatic withholding mechanism signals a commitment to modern revenue administration. Instead of relying on voluntary declarations, the system embeds tax compliance into the payout process itself. As a result, leakages reduce sharply, collections improve, and accountability increases. This structure also strengthens the operational relationship between LONATO and the OTR, ensuring smoother data sharing and financial reporting.
Equally important, the policy aligns Togo with practices already adopted in several African and international jurisdictions. Across many markets, governments tax lottery and gaming winnings to balance entertainment industries with public interest. Therefore, this move does not stand in isolation. Rather, it positions Togo within a global framework of responsible gaming regulation and sustainable fiscal management.
From the perspective of players, the change introduces clarity rather than uncertainty. Winners now know upfront what to expect at the point of payout. Transparency, in this sense, helps preserve trust in the lottery system. LONATO has emphasized that the tax applies only to winnings at or above the stated threshold. Smaller prizes remain unaffected, ensuring that casual players and low-value winners continue to enjoy full payouts.
Furthermore, the timing of the policy matters. As Togo advances reforms aimed at strengthening public finances, authorities increasingly seek predictable and diversified revenue streams. Lottery taxation, though modest in rate, offers steady contributions over time. When pooled with other reforms, it supports investments in infrastructure, health, education, and social protection. In this way, entertainment spending indirectly feeds national development goals.
Critically, the 5 percent rate strikes a careful balance. It generates public revenue while preserving the incentive to participate in lottery games. Excessive taxation could discourage participation and shrink the market. However, a moderate rate maintains enthusiasm while ensuring shared benefits between players and society.
Looking ahead, this reform may also open discussions around broader gaming regulation, digital betting platforms, and responsible play frameworks. As the sector evolves, policymakers will likely continue refining rules to protect consumers, promote fairness, and enhance revenue efficiency.
In conclusion, the introduction of a withholding tax on LONATO winnings represents more than a fiscal adjustment. It signals progress in governance, modernization of revenue systems, and a pragmatic approach to shared national responsibility. By combining simplicity, fairness, and transparency, Togo strengthens its financial architecture while keeping public trust firmly intact.
