The market for online casinos in South Africa is thriving. Millions of people in South Africa regularly participate in online poker games and other forms of internet gambling.
This surge in gambling, however, has refocused attention on gambling’s larger social and policy implications. The tax treatment of internet gambling winnings is, for sure, a part of this discussion. Should taxes be applied to these gains, and if so, how should they be levied? Given the complexity of the scenario, we’ve compiled a brief guide covering the main aspects of SA online casino taxation.
South Africa Casino Taxation Law
The 1925 case of Graham v. Green was the first to rule that a gambler’s wins were not to be included as profits or gains in the same way that a bookmaker’s income was. The latter could be taxed, while the former could not because they did not arise from the coordinated effort. Yet, in Morrison v. CIR. It was determined that a gambler who engaged in consistent betting operations was subject to income tax on his earnings.
The Morrison case added another layer of difficulty. It also suggested the question of whether or not to tax winnings from gambling should be on a case-by-case basis.
Casino Taxation Law In Practice
The South African Revenue Service (SARS) actually doesn’t collect taxes from recreational bettors. Gamblers who are well-organized and successful enough to have gaming qualify as a regular source of income are targeted for taxation. If you gamble on a regular basis, the argument goes, you’re not doing it for fun. Like any other profession, any earnings may be subject to taxation, while any losses may be deducted.
For a select few, notably individuals who make their living in the betting or gambling sector or in sports that are frequently the subject of gambling. Wins are subject to taxation since they are viewed as wages.
Is there a solution for online gamblers in South Africa? The good news is that, if gambling is not your primary source of income, your gains will not be subject to taxation. This is applicable whether you’re playing the lotto, betting on horse races, wagering on sports, or gambling at a casino. The only exception is the capital gains tax, although it applies to all other taxes as well.
Gambling winnings made abroad, or through unlawful means in South Africa may be subject to capital gains tax. This is especially important for online casino players, who, due to the ambiguous legal status of online casinos in South Africa. Players are compelled to play at casinos based in other countries. If you have questions regarding your tax obligations, it may be worthwhile to have a casual conversation with a solicitor or tax expert.
What to Expect
The government could impose further license or transaction fees on online gaming businesses. The fees collected might go towards supporting regulatory groups and their enforcement efforts to keep online gambling safe and fair for players.
Although talk of taxes or regulations is interesting, it is vital to remember that at the present time, online gambling remains illegal in South Africa unless you play with registered bookies in SA.
FAQ
Does ZA have online casino taxes?
Internet gambling is currently banned in South Africa, the country does not have any online casino-specific taxation. The government would undoubtedly impose taxes on internet gambling companies if they were to become licenced and regulated in the future.
Which casino games in South Africa have taxes?
At the moment, casinos and other forms of gambling on land are taxed in South Africa. The government hopes to use the money from these levies to pay for services related to problem gambling and other social initiatives.
What is South Africa’s casino taxation percentage?
The government of South Africa currently levies a 9% tax on casinos’ overall gambling profits, with an additional 1% going to the country’s National Responsible Gambling Program. If online casinos were made lawful, a similar tax system might be enacted.
