Tasmania is set to become the sixth state in Australia to introduce a point-of-consumption tax, aimed at properly taxing wagering operators on their operations, local media reports.
Under a point of consumption wagering tax, operators pay tax to the jurisdictions where the customers are located, no matter where the operator is located.
In the past, operators were taxed under a “point of supply” tax, in which operators would typically situate themselves in low-tax jurisdictions, targeting punters nation-wide.
Treasurer Peter Gutwein, said the new tax will roll out on 1 January 2020, and will be at a rate of 15 percent of net wagering revenue.
This has been considered by some as on the higher end of wagering taxes. In comparison, New South Wales and Victoria have a current rate of 10 and 8 percent respectively.
Gutwein said the new tax measure is expected to generate A$5 million (US$3.4 million) per annum.
“It is expected that additional revenue from this initiative will generate around $5 million per annum, with the net benefits to be appropriately shared with the local racing industry,” Gutwein said.
Responsible Wagering Australia’s Nick Minchin has slammed the rate of tax, stating that the Tasmanian Liberal government was introducing one of the highest wagering taxes in the world.
“This tax is almost double that introduced by Victoria’s Labor Government and the Tasmanian Liberal Government now holds the dubious honor of taxing Tasmanians at a higher rate than any other Australian state,” he said.
“The 15 percent Point of Consumption Tax introduced in South Australia threw a handbrake on that State’s racing industry and has almost brought it to its knees. In South Australia, prizemoney has been cut, field sizes have shrunk, participants have fled interstate and jobs have been lost.
“Starting off a much lower base, the Tasmanian Government has today put that same handbrake onto Tasmanian racing and thrown its future into massive uncertainty.
“The evidence is now well-settled when it comes to the deleterious impact of these punitive taxes on racing and jobs. That is why it is so disappointing the Tasmanian Government has ignored the evidence and decided to hit ordinary Tasmanians with this new tax.”