The NSW government is expected to announce a 10% point of consumption tax (POCT) on all online gambling wagers of NSW residents in the state budget next week. The POCT tax will come into effect on January 1st, 2019.
The announcement will follow similar POCT taxes already announced by South Australia and Western Australia at 15%, Victoria at 8% and Queensland which announced a 15% POCT this week.
Th NSW government took into account that wagering operators already pay GST, payroll tax and product fees when the 10% level was decided on.
Th POC tax will help to bring bookmakers, most based on the Northern Territories with little Australia wide taxes and fees outside of race field fees, onto a level playing field with the taxes that Tabcorp pays.
Two per cent of all online gambling revenue will be redeployed by the racing industry, the NSW Treasurer Dominic Perrottet will announce, which is expected to amount to $40m for the three codes of the racing industry, thoroughbreds, harness and greyhounds.
“The introduction of a point of consumption tax is an important step to ensure that we are levelling the playing field given the wagering tax paid by onsite operators,” Mr Perrottet said.
“We think 10 per cent strikes the right balance and that online corporate bookmakers should contribute their fair share.
“However, a 15 per cent additional tax on top of GST and race field fees would be an excessive burden on players in the market. We will review our 10 per cent rate in 18 months and also keep a close watch on how other states progress with their POCT.”
Under the new POCT all Australian-based wagering operators will pay a tax of 10 per cent of net wagering revenue generated from all wagering and betting activity of NSW residents. A tax-free threshold of $1m a year will apply for all operators.