The proposal to raise the point of consumption tax is anticipated to enhance Victoria’s racing sector. In 2019, Victoria introduced the tax at a rate of 8%, which was later increased to 10% in 2021.
The local government now aims to raise the tax further to assist the state’s horse racing industry. According to the latest proposal, the current rate of 10% may be increased to 15%, bringing it in line with other states like Tasmania, NSW, Western, and Southern Australia. However, even with the proposed increase, the tax rate for sports betting would still be lower than Queensland’s current rate of 20%.
After Tabcorp, Australia’s largest gambling firm, contended that offshore online gambling operators were not contributing a “fair share of taxes” to Victoria, the local government put forward the POCT increase proposal. If approved, the tax is projected to go into effect from July 2024.
The racing industry is expected to benefit from the tax increase
The horse racing sector is a significant contributor to the economy of Victoria, generating nearly AU$5 billion ($3.33 billion) annually and supporting over 35,000 jobs. With more than 100 clubs in the state, the racing industry is a crucial part of the economy. However, like all industries, it was not immune to the devastating impact of the COVID-19 pandemic.
To support the racing sector in the state, lawmakers have proposed an increased tax, with 7.5% out of the total 15% tax to be distributed to the racing industry. Anthony Carbines, the minister for Racing, explained that the proposed changes are aimed at providing long-term certainty for the industry, protecting thousands of jobs and events that bring in millions of dollars annually to communities across the state. In an interview with The Sydney Morning Herald, Carbines expressed confidence that the proposal would help the industry back jobs and events that are crucial to the state’s economy.