The Government of New South Wales is to impose a 10% tax on all online gambling wagers next week, at the time when the state budget is set to be presented by Treasurer Dominic Perrottet.
The new point-of-consumption tax is set to be officially rolled out in the state from January 1st, 2022. The new levy is pretty similar to the 8% one which was imposed on online bookmakers by the state of Victoria. The latter also unveiled a new point-of-consumption tax which was introduced in the state’s budget in May.
According to Mr. Perrottet, the local Government has found the right balance with the 10% tax, as online bookmakers should contribute their fair share to the state’s economy. The authorities considered a 15% tax rate would be an excessive burden on operators that already pay a number of other taxes, including product fees, GST and payroll tax.
The state’s Government could rake a revenue of approximately AU$100 million on an annual basis from the new tax, with about AU$40 million a year set to be redirected to the local racing industry, including greyhounds, thoroughbreds and harness. Treasurer Perrottet is expected to announce that 2% of all the overall online gambling revenue, which is set to be about 50% of the new tax proceeds, will be granted to the racing industry of New South Wales. Rumour has it that the money which is to be accumulated from the new levy could be used to fund the local greyhound racing integrity commission.
The implementation of the new levy is expected to bring no impact on the already existing racing tax arrangements in the state. For the time being, the New South Wales wagering tax on racing and sports is imposed on retail gambling operations, which basically means that most web-based gambling operations are not affected.
Australian States Unveil New Tax Rates
The new point-of-consumption tax is also aimed at putting foreign betting operators such as Ladbrokes and Sportsbet pretty much in the same environment as local companies such as Tabcorp in terms of the taxes paid to the State Government. Currently, most online gambling operators in Australia are based in the Northern Territory and are subjected to much smaller taxes there.
The Treasurer Mr. Perrottet commented on the introduction of the new point-of-consumption tax, describing it as an important step that would make sure that on-site operators are put pretty much under the same conditions, The further shared that state authorities have done everything possible to make sure that the racing industry would not be negatively affected by the new changes, but it had to receive fair compensation for the amendments.
A new point-of-consumption tax has already been unveiled across the country. South Australia and two other states – Western Australia and Queensland – were the first three Australian states to actually introduce or at least make a pledge to roll out a 15% tax rate. A number of online gambling companies, on the other hand, have been lobbying in New South Wales against the tax. After a certain period of consideration, the State Government came to the conclusion that the 15% tax rate is based on a similar British levy, which, however, does not take into account the fact that a number of other taxes are already paid by the operators.
- Author
Daniel Williams
