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NEW GAMBLING TAXES TO HIT SOUTH AFRICA IN APRIL 2012
Posted 2/24/11 : Finance Minister's budget speech this week shows his hand
Expect plenty of comment and not a little lobbying from the South African lottery, horseracing and soccer pools sectors come April next year, when new taxes are set to be introduced, according to this week's budget speech by South African Finance Minister Pravin Gordhan.
All winnings above Rands 25 000, including payouts from the National Lottery, will be subject to a final 15 percent withholding tax in terms of the new provisions, which are unlikely to sit well with the African nation's big gamblers.
The Minister has claimed that the measure is intended to discourage gambling, but he is expecting argument anyway, saying: “Despite the obvious merits of this argument, I expect vigorous debate during the parliamentary process.”
The withholding tax on gambling winnings was in line with practice in other countries including the United States, the Minister pointed out in a speech that also introduced a range of heavier "sin taxes" on alcohol and smoking, and hikes in airport taxes and the price of fuel through a tax element and a Road Accident Fund subsidy.
Social spending increased, benefitting the 15 million South Africans who receive social grants, with 38 percent of them going to pensioners, children in poor households (35 percent) and 10 percent to the disabled. The Minister has disclosed that there are now 10 million taxpayers contributing some Rands 670 billion annually.
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