Casinos in Gauteng, South Africa have been subjected to paying the government just 9 percent in gaming taxes for close to a decade. They were informed last week that their tax rates could be significantly higher before the end of this year based on a recent meeting held at the Gauteng Provincial Legislature.

During the meeting, Barbara Creecy, the Gauteng MEC for Finance and e-Government presented her R103 billion budget recommendations and proposed to hike the gaming taxes for casinos in Gauteng. The new proposal to increase gaming taxes is being done in order to increase the revenue and budget of the state government.

The budget for the government is around R97 billion per year and around R5 billion gets generated from taxes imposed on vehicle and gambling registration. The provincial government is looking to increase these taxes from R5 billion to around R5.6 billion before the end of 2019.  The additional funds generated through higher gambling taxes will be used to create more jobs for the younger generation which is growing at a rapid pace in Gauteng.

The government is also looking to invest into infrastructure projects that deal with educational development and constructing new schools to deal with the growing number of migrants that come to Gauteng every year.

In a statement, Creecy said “We are in the process of reviewing casino licences in the province. The Department of Economic Development issued new casino gambling regulations for public comment in January 2016. We have received substantive comments from our stakeholders, which the department is factoring into the draft that will present for consideration to the standing committee on sub-ordinate legislation.”

The new proposal will look to eliminate the flat 9 percent tax rate that all casinos in Gauteng currently pay. If the new bill gets approved, the bigger casinos in Gauteng will be subjected to higher tax rates while the smaller casinos could end up paying a lower tax rate. There are a number of large casinos in Gauteng province such as the Monte Casino, Gold Reef, Emperors Palace, Silver Star, Emerald Resort and Carnival who were not very happy to learn of the new gaming tax proposal and have expressed their concerns.

However Gauteng government officials have played down these concerns stating that these issues will be addressed in the coming weeks before the law is fully rolled out. Various economic activities in neighbouring provinces such as the Western Cap and KwaZulu-Natal have higher tax rates and this is another reason why the government believes it’s the right time for them to roll out new tax laws on the casino industry.

 

 

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