Abstract:
The gambling industry represents a significant economic sector in South Africa. Within the gambling industry casino operators are the largest generator of gambling revenue and, therefore, contribute the highest amount of taxes at both the provincial and national levels compared to other gambling operators such as horse racing bookmakers, bingo operators and sport betting facilities.
To obtain further tax revenue from the gambling industry, and particularly the casino industry, National Treasury proposed that South Africa, like India and the United States of America, introduce a tax on casino gambling winnings. As a result, a suggested fifteen per cent withholding tax on casino gambling winnings in excess of R25,000 was tabled by National Treasury in 2011.
Adam Smith’s four “Canons of Taxation” are generally regarded as the building blocks for any proposed tax, and the feasibility of a proposed tax may be measured against each of these four Canons of Taxation.
This dissertation aims to measure the feasibility of the proposed fifteen per cent withholding tax on casino gambling winnings, as tabled by National Treasury, against the Canons of Taxation. In addition, it aims to build on the proposed imposition of withholding tax by providing suggestions on how this withholding tax can achieve the four Canons of Taxation, by drawing from the withholding tax regimes imposed in India and the United States of America.
