South Africa: possible tax hike to casinos

"I am absolutely shocked and surprised," said Peermont CEO Anthony Puttergill. “The effective tax rate on casinos in the province is about 20% on average."

This was derived from "a combination of the casino tax rate and the VAT which we absorb because you can’t charge VAT on each of the bets", he said.

"I don’t think it’s correct that Gauteng is the lowest (tax rate), there are a number that are significantly lower," he said. The Western Cape’s 17% rate is only implemented when the casinos reach a certain level of revenue.

Tsogo Sun CEO Marcel von Aulock said: "Gauteng has the highest investment rates in casinos, which is why we have six large casinos in the province, and we made those investments because we knew what it was going to cost.

"They have the money from us and now they want to change to change the rules," he said.They want an increase in taxes and they want to increase jobs. You can’t have both."

Emerald Resort & Casino CEO Martin Rice was equally surprised. "This is the first we have heard about it. We met with the Gauteng MEC for economic development last week and they were asking us to increase investment and job creation," he said.

Von Aulock said the industry’s biggest frustration was the lack of co-ordination in the government. "The Department of Trade and Industry is doing a review, the provincial government wants to increase taxes, while other provinces want us to increase investment. Government has to have a coherent approach to the industry otherwise you have a disaster on your hands."