Online gambling tax tug-of-war brewing in Australia

The Australian federal government is at loggerheads with state governments over the former’s plan to take a slice of new online gambling taxes.

The Daily Telegraph reported that the states are up in arms over the plan of Federal Treasurer Scott Morrison to take a cut from the planned 15 percent point-of-sale consumption tax.

For now, the states are preparing for a showdown with Morrison during the national meeting of all treasurers at the Council on Federal Financial Relations. The meeting has been set two weeks from now.

The new point-of-sale consumption tax could see Victoria rake in AUD130 million (US$101.14 million) in tax from online gambling each year. The tax is expected to help the state “prop up its surplus,” according to the news outlet.

With the exception of the Northern Territory, the treasurers agreed with the idea of allowing the federal government to oversee the process to make sure that the state-by-state tax is consistent.

But the state treasurers oppose the idea of sharing a percentage of the tax with the feds.

Morrison, who met with the treasurers last March, confirmed the Federal government’s plan and said the proceeds will be used for sports funding.

The point-of-consumption tax is expected to be officially implemented in the state of New South Wales in January 2019.

“If the states want the Commonwealth to provide a national solution — and we have been very upfront about that — we would want it to address funding requirements for national sports, rather than consider a national lottery,” Morrison said.

South Australia was the first state to publicly call for the imposition of a POCT back in 2015, when Treasurer Tom Koutsantonis declared that it was “important that online gambling operators pay taxes considering that they are generating profits based on betting activities of South Australians.”

Calvin Ayre

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