The introduction of a gambling tax in South Africa: What are the odds on the implementation thereof?

• Main Authors: Milton Segal, Warren Maroun
• Format: Article
• Language: English
• Published: AOSIS 2014-07-01
• Series: Journal of Economic and Financial Sciences
• Subjects: South African tax system; taxation on gambling; unintended consequences; tax reforms
• Online Access: https://jefjournal.org.za/index.php/jef/article/view/145
• ISSN: 1995-7076; 2312-2803

The South African Revenue Service has been exploring the possibility of implementing a form of taxation on gambling winnings since the Minister of Finance’s Budget Speech in 2010. On a superficial level it seems a logical mechanism for broadening the tax base – a case of increasing the tax collected from those who can afford the luxury of gambling. There are, however, a number of unintended consequences that government does not seem to have considered. As a result, this article uses a detailed content analysis of the prior academic and professional tax literature to explore possible weaknesses/flaws of a tax on gambling winnings in South Africa. These include the administrative burden of such a tax, certain economic consequences of allowing gambling losses as a tax deduction and the possible social consequences thereof. These findings mean that the article provides a meaningful contribution by critically assessing the proposed tax with the aim of informing policy development and future quantitative studies on a tax on gambling winnings.