Neds - Copyright: somartin / 123RF Stock Photo

Victoria to introduce lowest consumption tax in Australia

The Victorian Government is to introduce an eight per cent online point of consumption tax, which it has been stated will raise an estimated $30m per year, report Australian media outlets.

Coming into force at the start of 2019, and taking a proportion of bookmakers monthly earnings, Treasurer Tim Pallas, announcing its introduction, said the tax has been designed to ensure sufficient steps are taken to address the harms of problem gambling, telling Australian Broadcasting Corporation (ABC): “We’ve got a situation at the moment where online gaming operators are effectively avoiding tax, they don’t pay a cent of tax.

“The aim here is to make sure that we do no harm to the racing industry but we stop the leakage in revenue that should properly be the just desserts of Victoria.

“We do need to recognise that harm is being done through the provision of gambling products and the appropriate payments by those operators to assist in dealing with that harm has to be made.”

The eight per cent tax rate is the lowest in the country, with South Australia operating a fifteen per cent point of consumption tax, Western Australia due to implement the same rate in the coming months and Queensland vowing to follow suit.

Stephen Conroy, Executive Director at Responsible Wagering Australia, stated that “this new tax will nevertheless have significant negative and far-reaching consequences for Victoria,” whilst acknowledging the Victoria Government’s consultative approach.

Highlighting the online industry employed around 1,000 individuals from the state, paid $6 million in state payroll tax, as well as $80 million to the racing industry: “The online wagering industry already pays a significant amount of consumption tax through the GST, as well as corporate income tax to the Federal Government.

“An eight-per-cent POCT does not adequately account for these significant contributions and will result in Victoria having one of the highest effective wagering tax rates in the world.”

Tim Costello, Director at Alliance for Gambling Reform, welcomed the introduction of the tax rate, although saying it should’ve been higher, and stated that Conroy “should stop trying to pressure various state and territory governments to delay and minimise the tax”.  

Adding: “It is scandalous that the 24 licensed bookmakers and betting exchanges in the NT only budget to pay a miserly $5.4 million in taxes to Territorians in 2017-18 when Australians are losing close to $2 billion a year gambling with these companies.”

The introduction of the tax will commence in January, dependant on whether it passes state parliament.

Check Also

Betsson H1 results disrupted by tough regulatory dynamics

Nordic market adjustments and Dutch declines have seen Betsson AB governance report a 5% year-on-year …

Irish government calls for increase to greyhound welfare funds

The Irish Cabinet has called for the greyhound industry to boost its welfare spending after …

Paddy Power launches ‘Save Our Shirt’ campaign alongside ‘real Huddersfield kit’

Paddy Power have announced it’s controversial ‘sash’ style Huddersfield Town kit was just a hoax, …