Gambling Winnings Tax South Africa

NGB Goes Up Against Online Casinos &Cryptocurrency

• Gambling Winnings Tax South Africa 2019
• Gambling Winnings Tax South Africa 2020
• Gambling Winnings Tax South Africa Gauteng

In South Africa, online casinos are still causing the National Gambling Board headaches, and emerging crypto-currencies are just adding fuel to the fire says Caroline Kongwa. Kongwa is the NGB Accounting Authority, and she made this statement over the course of a two-day conference in Pretoria, Gauteng, over the 18th and 19th of July.

Players may be surprised to learn that in the vast majority of cases, South Africans do not have to pay tax on lottery, casino or competition winnings, allowing them to enjoy the total sum. The article looks at three scenarios: Winning R5 million in the National Lottery, winning R200,000 at the local casino and winning R100,000 in a competition. And that you are not bound to pay taxes on it. Online casinos are perhaps the second most popular form of online gambling in South Africa that can win you a massive jackpot, and it’s not the first time someone has managed to cash out a huge sum. Hence, it is normal to ask, even in these scenarios, whether tax is applicable on. Unlike the United States, South Africa doesn't generally tax recreational gambling winnings. You may be required to report large winnings to the South African Revenue Service, but your windfall won't be subject to capital gains taxes. 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. Luckily in South Africa, in most cases, casino winnings are seen as being exempt from gambling online taxes, as are lottery winnings and competition winnings too.

Winnings Confiscated

The issue hasseen the NGB and South African Police Service raiding illegal online casinos,with the Department of Trade and Industry confiscating R1.25 million worth ofwinnings in 2017. The board has revealed that illegal online activities areeroding revenue generated by the legal betting industry. It noted thatoperators are creating games that compete with what has traditionally beenoffered, and this has had a detrimental impact on formal betting.

Kongwa statedthat this impacts the government’s tax revenue ultimately, which then resultsin a loss of employment opportunities, a decrease in local economic activity,and consumer rights and protections being eroded.

International Operators are Problematic

Online gambling includes Poker games, traditional casino games like Roulette and Blackjack, and sports betting, and these options have been available since 1994. Although many countries restrict online betting or ban it altogether, it has been legalised in certain Canadian provinces, the majority of the European Union, and several Caribbean nations.

Kongwarevealed that online operators continue to offer their services in South Africadespite not being strictly legal. The only lawful route for South Africans isbetting through licensed bookmakers who have the proper permits to offerwagering on sports events and horse races. Citizens are not able to gamble withunlicensed international operators.

Gambling Winnings Tax South Africa 2019

Serious Consequences for Law-Breakers

Presently,the gambling industry, except the National Lottery but including otherlotteries like society lotteries, promotional competitions and sports pools, isunder the regulation of the NGB. It is also subject to the 2004 NationalGambling Act. Kongwa said that, in light of online gambling being illegal inSouth Africa, operators face severe consequences if they’re caught offeringunlawful games, and gamblers could see their winnings being confiscatedentirely.

Kongwa went on to say the gamblers could also face prosecution for taking part in illegal activities. She went on to say that the Department of Trade and Industry took the National Gambling Amendment Bill to parliament in 2018, and this recommended no new forms of betting be allowed. It also included several improved provisions regarding legislation to deal properly with illegal gambling.

The proposedbill suggested provisions should be included which forbid illegal winnings,along with amendments to ban Internet service providers, banks, and otherpayment facilitators from smoothing the way for unlawful activities to occur.This bill would also cover the transferal, payment, and promotion of payment ofillegal winnings to South Africans.

Gambling Winnings Tax South Africa 2020

Gambling Winnings Tax South Africa Gauteng

Thisprohibition will require extreme vigilance by the NGB in terms of alertingvarious institutions to illegal operations. If this notification fails to beimplemented, the affected body or institution will be criminally liable interms of the Act, and any winnings could be added to the Unlawful WinningsTrust.