Illegal online gambling means big loss for SA
The Casino Association of South Africa (CASA), which has recently launched a campaign aimed at illegal online players, operators and service providers, is working to ensure tax revenues from legal gambling establishments are kept intact.
On February 25, South Africans will listen to the 2015 Budget Speech where it will be announced how the government intends to spend the hard-earned tax revenue of its citizens.
The South African budget is estimated to be some R110-million less than it would have, due to thriving and rapidly growing illegal online gambling in South Africa.
The Casino Association of South Africa (CASA), which has recently launched a campaign aimed at illegal online players, operators and service providers, is working to ensure tax revenues from legal gambling establishments are kept intact.
“South Africa relies heavily on tax revenue with 34 percent derived from personal tax and 20 percent from corporate tax. Any erosion of the corporate tax base means more burden for individual taxpayers. There is already talk of moving the VAT rate from 14 percent to 15 percent to inject an additional R16-billion into the economy and adding VAT to zero-rated foods as options,” said Mr Themba Ngobese, the chief executive officer of CASA.
Finance Minister Nhlanhla Nene announced in 2014 the need for a progressive tax policy and reforms to raise at least R27-billion over the next two years.
“The legal casino industry in South Africa contributed R4.5-billion in tax revenue last year, which is a significant proportion of the country’s budget from just one business sector. Any erosion of this amount is a real issue for the country,” said Mr Ngobese.
Casino revenues are already showing signs of contraction.
Overall revenues grew by a mere 0.6 percent in 2013/14, compared to the 10 percent growth in 2012/13.
“While some of this reduced growth is certainly attributed to the overall slowing of the South African economy in the past 18 months to a growth of one to two percent, our evidence suggests that more aggressive illegal online gambling operators are targeting South Africans and taking revenue off-shore,” Mr Ngobese said.
“We estimate that at least five percent of the revenue contraction in 2013/14 was due to the movement of expenditure to offshore, illegal online gambling entities. That five percent loss of revenue equates to R110-million less gaming tax revenue this year for the country,” he said.
R110-million could pay the salaries of an additional 594 teachers, or equip around 11 000 school children with a computer tablet and broadband access for the year.
