Aussie provinces agree on the need for tax harmonisation

Australia’s six states and two on-shore territories (Queensland, Victoria, Tasmania, New South Wales, Western Australia, South Australia, the Northern Territory and the Australian Capital Territory) have been holding meetings with federal government Treasurer Scott Morrison in an attempt to harmonise taxation across the country on categories such as general sales tax and, importantly for the industry, gambling companies.

There appears to be agreement in principle but gambling tax is an area where one participant – the Northern Territory – is holding out.

NT has the more benevolent tax regime when it comes to gambling taxation, and has attracted almost all of the big name bookmakers looking to licence online operations to the chagrin of other states and territories which are greedier, but resent NT reaping tax revenues they feel should be at least in part theirs.

South Australia has tried to secure its share by the forthcoming introduction of a UK-style 15 percent point-of-consumption tax on all revenues accrued by bookies from residents of that state.

South Australia treasurer Tom Koutsantonis pioneered the project and is supported by federal Treasurer Morrison in his plans to introduce the new system in South Australia at the beginning of July, predicting that it will initially raise an extra A$ 9.2 million for his state.

Morrison has on several occasions commented that he favours the South Australian approach, which he thinks would be a good thing on a federal basis.

Several Australian media outlets have characterised the harmonisation agreement as a case of the federal and states authorities “ganging up” on the Northern Territory, but it remains defiant in defending its right to decide what rate of taxation it charges gambling companies licensed within its borders.

The issue is relevant to NT-licensed operators because it could mean higher costs if NT tax rates were hiked as a result of a decision by the feds and other states to have a national tax policy based on point of consumption (ie where the player accesses the services).

This week a spokesman for the NT Treasury assured licensees like Sportsbet, Ladbrokes, bet 365, betfair and Unibet that NT intends to fight the imposition of such taxing and the job losses it could trigger in the territory.

“This [NT] government will fight it all the way,” a spokesman for the Treasurer’s office said. “More than 350 Territorians are employed by corporate bookmakers, injecting millions of dollars into the local economy.

“If the proposed tax goes ahead it would remove the Northern Territory’s competitive advantage as the home of corporate bookmaking in this country.”

Casino operator Vera&John and 888poker stopped operations Downunder late in 2016 and early in 2017, respectively (seeprevious reports.

Pokerstars CEO Rafi Eskanazi recently told reporters that his company may have to consider withdrawing from the Australian market due to the increasingly hostile legislative situation.

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