Increased Sin Tax to be Imposed on Western Cape Casinos

The Western Cape Government has tabled legislation that proposes an increase of the sin tax on casinos operating in the Western Cape.

The proposal is contained in an amendment to the Western Cape Gambling and Racing Act, 1996 (Act 4 of 1996) tabled in the Western Cape Provincial Legislature last week.

The amendment - the Western Cape Eighteenth Gambling and Racing Amendment Bill, 2013 - follows the tabling for public comment of two Draft Amendment Bills last year.

Comments on the Draft Amendments were received from a number of interested parties, mostly from the casino industry.

Following the public comments received, the Western Cape Treasury has decided to split the issue of the relocation of one of the outlying casino’s to the metropolitan area and taxes, which were previously combined, into separate processes.

Treasury will approach the Western Cape Legislature at a later stage to deal with the issue of the relocation of one of outlying casinos into the Metro.

The Western Cape Eighteenth Gambling and Racing Amendment Bill, 2013 seeks to increase the rate of tax payable by the holders of casino operator licences by a 2 percentage point flat tax rate increase on each of the six tax bands. The amendment proposes increases to both the amount of tax and the percentage of the taxable revenue payable.

The 2 percentage point flat tax rate will be calculated as listed in clause 1 (a) of the Bill.

Western Cape Minister of Finance, Alan Winde said: “We have decided to abandon previous legislation due to public comment we received. We have paid due regard to the concerns raised by members of the public.”

“The additional taxation that will accrue as a result of the proposed amendment will add an additional R25 million per annum to the Provincial Revenue Fund. This is money that will be used to improve service delivery to the citizens of our Province. This proposed flat tax is in effect a sin tax on casinos operating in our Province” Minister Winde explained.