South Australia turns to POC tax

South Australia turns to POC tax

Tuesday, April 28, 2015 Totally Gaming
South Australia is considering the introduction of a new gambling tax

South Australia could become the latest jurisdiction to introduce a point of consumption (POC) tax.

The Australian state's Treasury, led by Treasurer Tom Koutsantonis, has been tasked with leading a review into introducing a tax that would charge online gambling operators on the location of its customers wagering.

The Treasury estimates that more than 70,000 South Australians have wagered using online gambling services, and it will look to re-structure current online gambling policies in order to raise a potential AUS $50m ($39.8m/€36.4m) per year in state funding.

The tax scheme has been positively met by the South Australia Council and state social services. Council members noted that at present South Australia, which includes Adelaide and a population of almost two million, and other states were losing vital tax funding from Australian consumers wagering with online gambling operators.

Speaking to newspaper The Advertiser, Koutsantonis said: “Currently we charge authorised interstate online betting operators a small annual fee.

"Authorisation allows interstate betting operators to advertise and conduct betting operations in South Australia. But under the current tax regime, these online betting services pay no tax because they are not based in South Australia.

"I have asked my department to look at such a model in which we will report back to the other states mid this year and discuss how such a model might work nationally.”

The UK introduced a point of consumption tax last year as part of the Gambling (Licensing and Advertising) Act 2014.

The introduction of the tax means that all transactions with UK customers will be subject to remote gambling duty at a rate of 15 per cent on gross gaming revenues, regardless of the location of the operator.

William Hill, the UK's largest bookmaker, recently said that its performance in Q1 2015 was down year-on-year due to a £20m ($30.6m/€27.8m) hit related to the introduction of the tax.

Earlier this month, the Irish government announced that their new POC tax would take effect on August 1, after which all Irish-facing online operators will pay a one per cent turnover tax – or 15 per cent of betting exchange revenue – on all wagers taken from Irish punters. 

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