A few years ago, in 2019, Victoria, the second smallest yet second-most-populated Australian state after New South Wales (NSW), implemented the point of consumption tax (POCT). At the time, the tax was only 8%, but it has undergone an increase to 10% back in 2021. Now, the local government seeks to further increase the aforementioned
Proposal in Victoria Calls to Increase Sports Betting Tax
A few years ago, in 2019, Victoria, the second smallest yet second-most-populated Australian state after New South Wales (NSW), implemented the point of consumption tax (POCT). At the time, the tax was only 8%, but it has undergone an increase to 10% back in 2021. Now, the local government seeks to further increase the aforementioned tax in an effort to help strengthen the state’s horse racing industry.
The current POCT rate may undergo an increase from 10% to 15% under the new proposal, details of which emerged earlier this week. This will take the tax to the same level as in other states such as Tasmania, NSW as well as Western and Southern Australia. But even if it is greenlighted and increased to 15%, the sports betting tax rate would still remain below the rate currently in effect in Queensland which is set at 20%.
The local government proposed the POCT increase after Australia’s largest gambling company, Tabcorp, claimed that overseas online gambling operators aren’t contributing with a “fair share of taxes” to Victoria. Ultimately, if the proposal lifts off and receives approval, the tax is expected to be implemented starting from July 2024.
The Increase in Tax Is Expected to Boost the Racing Industry
The horse racing industry represents a major part of the economy of the state. Annually, it generates nearly AU$5 billion ($3.33 billion), while at the same time helping support more than 35,000 jobs. Victoria’s racing industry has more than 100 clubs, which is a further testament to the importance of the sector.
Yet, no industry was protected when the COVID-19 pandemic started a few years ago. Not unexpectedly, horse racing felt the devastating impact as well. With the increased tax, now lawmakers are trying to help the racing sector in the state. The proposal anticipates distributing some 7.5% out of a total of 15% tax to the racing industry.
“These changes provide vital long-term certainty for the industry and ensure that it continues to be funded from wagering generated on its product – helping the industry to back jobs and events that bring in millions of dollars each year to communities right across the state.“
Anthony Carbines, Racing minister
Anthony Carbines, the minister for Racing, was interviewed by The Sydney Morning Herald and explained that the proposed changes seek to help the industry in the long term. According to him, the proposal will help protect thousands of jobs and events that raise millions of dollars annually for the state.
