Manne wrote:
A TAX windfall of almost $50 million each year will flow to South Australia from a decision allowing state governments to charge online gambling companies based on the location of the gambler, not the head office of the company.
About 74,000 South Australians have an online gambling account through 19 interstate betting operations, but none of the companies pay any tax in this state.
Treasurer Tom Koutsantonis has told The Advertiser that, following a meeting of state and territory treasurers this month, SA has been given the job to work out how to implement the scheme.
“South Australian clubs and pubs pay their fair share of gambling taxes which go towards providing essential State Government services,’’ Mr Koutsantonis said.
“It is important that online gambling operators pay taxes considering that they are generating profits based on betting activity of South Australians.”
Clubs SA, the SA Council of Social Service and the Australian Hotels Association SA branch support the plan.
Clubs SA represents not-for-profit community clubs which use pokies to raise revenue to be put back into the organisation.
It has argued it is disadvantaged by no-tax paying, online gambling “for-profit” corporations.
A Clubs SA submission to the current State Government tax review, obtained by The Advertiser, shows modelling by a “top four” accountancy firm estimated that the new tax take would be worth $4.7 billion nationally over ten years.
The state’s take of that would be $47 million each year.
The submission states: “So in this state, a tax for online gambling set at 40 per cent to match that of existing ‘for profit’ gambling businesses would generate many millions for South Australia and that would create many options for the State Government’’.
Clubs SA CEO Mike Penfold said online gambling options, which make up about 10 per cent of the market, were drawing revenue from SA-based organisations without paying anything towards public projects like helping problem gamblers.
“All the money we raise from gaming is returned to the community and we pay the highest tax in Australia for not-for-profit organisations,’’ Mr Penfold said.
“What online gambling does is take the revenue out of South Australia.’’
Under current rules, gambling companies pay a $1500 fee to allow them to operate in SA, but no taxes.
The state collects $390 million in tax from gambling companies which are based here and employ South Australians.
“Currently we charge authorised interstate online betting operators a small annual fee,’’ Mr Koutsantonis said.
“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.”
As part of authorisation requirements, online betting services are required to report on how much of their business occurs in South Australia, Mr Koutsantonis said.
“At the moment that is self-reported, so if you applied a tax regime based on this information you would need to establish a process of audit and compliance which would be much more reliable,” he said.
“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.”
Originally published: No Cookies | The Advertiser
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2015/06/05
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