New Tax on Winnings Imposed on the South African Gambling Industry
There is no doubt that the South African gambling industry, just like any other in the world is growing in tremendously. This is largely attributed to the fact that most people are enticed by the offers and winnings promising on these casinos. Come 2012 however, the industry is going to face a major blow.
Starting April 2012, the South African government is going to impose a new tax law on the winnings received in casinos. This piece of information was announced by the Finance Minister and it states that the industry is expected to deliver a 15% tax on the winnings which are over ZAR 25,000 which translates to EURO 2,200. This has in turn raised a lot of skepticism, anger and resentment from certain quarters in the industry. By large, these include the industry executives, associations as well as the gamblers. The prospect of this increment had first been mentioned by Minister Pravin Gordhan during his speech for the annual budget. This was however dismissed by most people but when the announcement was made officially, it angered a lot of people across the gambling board.
Due to this development and the fact that the gambling laws in South Africa are pretty strict, there is a large possibility that there will be cases of job loss and cuts. What is more, this is without a doubt going to be a major blow to the gaming industry in the country. 2012 is almost here and people are still skeptical about the wisdom behind this decision considering the fact that the industry has been seen to flourish over the last couple of years and this is bound to be one deadly blow.
The director of the largest sportsbook in the country, Lisa Haines is said to have termed the directive as ridiculous. She attributed this to the fact that most players were already paying a 6% tax as well as VAT which is already considered too much in the industry. On the other hand, CEO of another major association gambling association in the country is said to have stated that the increment was illogical and that there were no consultations carried out with the major players in the country. This aspect alone id used to show that the move is not only unfair but uncalled for. He termed it as the third tax increment a trend that seems to be a little worrying. What is more, he said that the parliament did not approve the move either.
Though there have been several letters written to the government by Casino Association, no feedback has been forthcoming. These letters were sent together with some expert onions as well as scientific data to dispute the increment. With this move, the poker industry is also going to suffer immensely and so far, there are some tournament directors who are trying to formulate the best approach for dealing with this tax increment. The racing industry is also going to get affected as well. The finance minister on the other hand believes that the increment is a way of persuading people to avoid excessive gambling.