The National Treasury has introduced new betting taxes that will see it collect billions in additional revenues. The fresh tax measures which are set to come into force in January are contained in the Finance Act 2016 and will see betting firms part with a sizeable chunk of their revenues every month besides paying the annual corporate tax.
Under the new legal regime, companies will pay a 7.5 per cent betting tax, 12.5 per cent gaming tax and five per cent lottery tax on revenues earned in lotteries and raffles.
The provision on betting requires firms to deduct customer winnings from total revenues earned and then charge a 7.5 per cent tax on the residual amount. Gaming companies will similarly deduct customer winnings and pay a 12.5 per cent tax on the remaining amount. Gaming refers to competitions whose outcomes are determined by chance rather than those that depend on the skills of a player such as roulette.
The competition tax is chargeable on the cost of entry into a competition, which is premium rated at 15 per cent of the gross turnover. Premium rated competitions are those where participants are charged an entry fee.
