A “surge in online gambling and its impact on society” has prompted National Treasury to consider a 20% tax on gross gambling revenue from online betting.
The idea is contained in a draft national online-gambling-tax discussion paper, on which the Treasury has invited public comment.
Its proposal is that a 20% tax be “applied on gross gambling revenue from online betting, including interactive gambling”, and which would be “in addition to the currently applied provincial taxes”.
The Treasury said in a statement: “The discussion paper provides an overview of the gambling industry in the country, considers the current legislative framework and international practices on the taxation of online gambling and proposes a new national online gambling tax for South Africa.”
It noted that the industry had “evolved from traditional forms of gambling to the greater use of online gambling”.
This has been influenced by technological advancements and increased access to the internet and electronic communication tools, especially following the Covid-19 pandemic. Gambling is now easily available online and it is accessible almost anywhere and at any time.
“The growth of online gambling also brings challenges, such as problem gambling and social issues, which require continued monitoring and responsive regulation.
“From a public policy perspective, there should be no problem with recreational gamblers as they do not place any external costs on society.
“However, to the extent that problem gambling imposes a cost on society (negative externalities), it is in the public interest that such behaviour be regulated or reduced,” National Treasury said.
News24 reports the Treasury as saying that “the main objective of the reform would not be to raise further revenue, but rather to discourage problem and pathological gambling and their ill effects”.
According to News24, Statistics SA data on spending shows that gambling represents half of all “recreation, sport, and culture” spending, far exceeding other recreational activities such as gym fees.
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