Victoria is considering increasing the point of consumption tax (POCT) for the second time in three years.
The increase would bring more money to the racing industry. However, bettors won’t be thrilled.
Currently, the point of consumption tax in Victoria is 10%. It is lower than Queensland’s tax rate of 20%.
It is also less than the 15% that Western Australia and New South Wales are charging bettors and sportsbooks. South Australia and Tasmania’s POCT is at 15% too.
If the initiative is successful, Victoria’s betting tax could rise to 15%, and changes will go into effect from July 2024.
Following in Queensland’s Footsteps
When the first POCT was introduced in 2019, the rate was 8%. The reasoning was that foreign betting operators had to contribute towards the racing industry and an 8% tax was deemed fair.
Two years later, the POCT rate rose to 10%. Now, Victoria is thinking about a new tax hike, and the legislative initiative, which the Victoria Racing Industry welcomed, once again comes two years after the previous increase.
Tax hikes have proven beneficial for the racing industry which is still trying to come back from the negative effects of COVID-19.
For instance, it was predicted that the 5% tax rise in Queensland, from 15% to 20%, would increase racing industry revenue by as much as 250%.
The proposed POCT hike in Victoria is likely motivated by the same desire to boost tax revenue and bring in additional funding to the racing industry in the state.
With races such as the Melbourne Cup and WS Cox Plate being super popular with bettors, it is easy to see how a tax increase could help the racing industry in Victoria too.