Gambling stakeholders in South Africa have been given one more month to respond to proposed tax hike amendments.
In November last year, a proposal was tabled to update the African nation’s tax regime by implementing a unified online gambling tax. The initial deadline for consultations was 30 January, but it has now been pushed back to 27 February.
A unified online gambling tax would mean an end to the current provincial-level licensing fragmentation that South Africa has in place. Gambling firms are taxed on a GGR basis, with amounts ranging from 6% to 20%.
Such a varied fragmentation has been previously criticised by local gambling stakeholders, who have been calling for a more stable structure that would better protect the market against illegal operators.
If the proposed amendments are successfully voted into law, experts anticipate that the total online gambling tax rate will land between 26% and 29%, with the other main difference to the current landscape being that tax collection will be centralised.
Interestingly, while there is an evident increase in tax rates, gambling firms may be swayed to back the changes in an effort to amend South Africa’s outdated gambling legislation.
Adopted in 2004, the country’s National Gambling Act prohibits all types of online gambling besides online sports betting and online betting on horse racing.
However, the latest tax proposal by South Africa’s National Treasury explicitly mentions that interactive gambling also falls within the suggested tax measures – meaning that if adopted, the bill will almost certainly legalise online casinos.
Bringing iGaming officially under its remit will allow the South African government to take appropriate measures when it comes to player protection, with concerns about domestic users falling victim to gambling harm by using illegal gambling platforms currently at their highest.