Gauteng rolls dice for a casino tax levy

A new gambling tax levy for casinos operating in Gauteng is on the cards in a bid to increase its provincial revenue collection base.

A new gambling tax levy for casinos operating in Gauteng is on the cards in a bid by Premier David Makhura's provincial government to increase its provincial revenue collection base.

If the move succeeds - local casino operators will cease paying a 9 percent flat rate to the provincial government - and a new payment model would be put in place to further enhance the revenue collection.

This was revealed by the Gauteng MEC for Finance and e-Government Barbara Creecy when she delivered her R103 billion budget in the Gauteng Provincial Legislature.

At least 95 percent of the provincial budget allocation - which is about R97 billion - came from the national government and the remainder, close to R5bn, was generated provincially through various taxes including gambling and vehicle licence registration.

On Tuesday, Creecy said her government was planning to increase its revenue collection from R5bn to R5.6bn by the end of their political term in 2019 and their primary aim was to increase job opportunities for the ever-increasing population of young people in Gauteng.

She said the increase would also assist in tapping in new infrastructure development projects like the construction of new schools to meet the annual increase in migration of people to Gauteng. It is estimated 200 000 people flock to Gauteng annually.

Detailing their proposed plan, 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.”

She said the new regulations was the provincial government’s way of finding means to optimise its revenue collection.

“Our suggestion is that there should be a differentiation of rates between big and smaller casino operators.

“At the moment all of them were paying a flat rate of 9 percent. If we differentiate, it will mean that the big casinos were expected to pay a bigger amount while the fees for the small players will go down,’ Creecy said.

Gauteng casinos have been paying the flat rate of 9 percent for more than 10 years and it is lower compared to other major provinces in terms of economic activities like in KwaZulu-Natal and Western Cape.

The Sunday Independent understands there has been a mixed reaction to the proposed gambling regulations and some of the bigger operators have registered their opposition to the proposed law.

However, the Gauteng executive under Makhura was expected to deal with the matter in the next few weeks before it could be ratified into law.

Bigger casinos likely to pay more are Emerald, Silver Star, Carnival, Morula, Gold Reef, Emperors Palace and Monte Casino.

“We continue to be aggressive in our revenue collection. By January this year, actual collection was at 91 percent. We are therefore confident that we will meet the adjusted revenue target we have set for ourselves,” Creecy said.

The finance boss also indicated the provincial government has set up a task team to merge various government entities to avoid a duplication of jobs in their efforts to intensify cost containment measures in keeping with the national guidelines.

While Creecy did not specify which entities would be affected, in the past Gauteng had merged the Liquor Board and Gambling Board into one entity until four years ago when they were separated and each had its own chief executive and board members.

The Sunday Independent understands the government was intending to re-integrate the two boards into one.

Similar plans are under way for other agencies particularly in the tourism and other economic generating sectors and all these were handled by the MEC for Economic Development Lebogang Maile.

Yesterday, Maile confirmed the plans were at an advanced stage but also declined to comment on specifics.

“Yes, I can confirm. All these are intended for financial efficiency and cost saving measures. We are going to keep entities where we are getting value for money,” Maile said.

Maile also said the executive council would make a final decision on the number of entities to be retained and their terms of operations.

Afterwards, The Sunday Independent understands, the provincial government would then be tasked to determine the salaries of chief executives and board members of each entity based on the national treasury guidelines.

Sunday Independent