Australian province to impose point-of-consumption tax on operators

Following the July 2017 lead of the South Australian government, Western Australia has announced a 15 percent point-of-consumption tax on online bookmakers which will be introduced from January 1 2017.

The Australian newspaper reports that the trade body Responsible Wagering Australia is disappointed by the move, given that the WA government had agreed to participate in the federal Government’s national wagering tax plan.

The new tax means that online operators will be paying an effective tax rate of more than 40 percent on revenue from customers in WA, making the state among the highest gambling tax jurisdictions in the world.

The RWA claims that the WA decision to impose the new tax jeopardises the achievement of a nationally harmonised tax and consumer protection regime in Australia.

RWA executive director Stephen Conroy warned that the WA decision will force operators to pass the tax cost on to punters, resulting in lower returns to the WA racing industry.

Paul Papalia, WA’s racing and gaming minister, shrugged off the warning, arguing that the p.o.c. tax will be informed by the national tax discussions. He said that the tax would be introduced
from January 1, 2019, and would replace the current tax framework and apply to all forms of wagering, including fixed odds and totalisator for racing and sports.

He defended the WA government’s action, saying that the provincial government retained the flexibility to adopt relevant national harmonisation elements, as agreed by the Council on Federal Financial Relations.

South Australia’s p.o.c.tax of 15 percent of GGR is applied to gambling companies earning more than A$150,000 a year from South Australian punters. The Victoria state government is also considering a similar tax move after discussions last year between the various provinces and the federal government on a national conversion to a p.o.c. tax formula (see previous reports).

Related and similar