State Treasurer announces that point-of-consumption tax will be 10 percent
The Australian state of New South Wales, despite heavy lobbying by local gambling group Tabcorp for a 15 percent point-of-consumption tax on online betting similar to that introduced in South Australia, Western Australia and Queensland, has instead decided on a more balanced 10 percent rate based on GGR… slightly more than Victoria‘s 8 percent.
A tax-free threshold of A$1 million a year will apply for all operators.
State Treasurer Dominic Perrottet revealed Tuesday that the tax will be formalised on all online sports bets within the state when the state budget is finalised next week, and will commence from January 1 next year. Observers say that the Treasurer will shortly announce that a substantial portion of the p.o.c. tax harvest is earmarked for the state racing, thoroughbreds, harness and greyhounds industry.
NSW hopes to raise about A$100 million from the tax. The government was lobbied on the tax proposal by online companies, who argue that the 15 percent rate is based on the British p.o.c. tax model which does not take into account the fact that the betting operators in Australia already pay GST, payroll tax and product fees…and TAB has an exclusivity arrangement in relation to on-the-ground betting.
“The introduction of a point of consumption tax is an important step to ensure that we are levelling the playing field given the wagering tax paid by on-site (retail) operators,” Perrottet said in a statement.
“Following an extensive consultation period with stakeholders, this decision will resolve the disconnect between the jurisdiction where gambling activity occurs and where it is taxed. We also want to make sure that the racing industry is no worse off under these changes, which is why we have taken steps to ensure that they receive fair compensation and that existing parity arrangements are unchanged.
“We think 10 percent strikes the right balance and that online corporate bookmakers should contribute their fair share,” Perrottet said. “However, a 15 per cent additional tax on top of GST and race field fees would be an excessive burden on players in the market. We will review our 10 percent rate in 18 months and also keep a close watch on how other states progress with their POCT.”
