New national tax coming to South Africa in 2027

Finance Minister Enoch Godongwana said the National Treasury will reveal a new National Online Gambling Tax in the 2027 Budget. 

This comes after a discussion paper was published by the National Treasury in 2025 proposing such a tax to limit the growth of online gambling. 

“Due to the surge in online gambling and its impact on society, it is proposed that a 20% tax is applied on gross gambling revenue from online betting, including interactive gambling”, it said in the discussion paper. 

The National Treasury estimated the tax would raise R10 billion in additional revenue for the government, but that money was not the point of the tax. 

“The way we look at this is that it is closer to a sin tax. The mechanism is not quite the same. It won’t be taxed like alcohol or tobacco on a per-drink or per-cigarette basis, but we are going to tax the companies,” National Treasury’s Christopher Axelson said.

“We look at it like a sin tax. If there is a reduction in online gambling because of this tax, we would be happy with that, even if it reduces tax revenue.” 

The proposed tax was met with stiff opposition from gambling companies and tax professionals who warned that it would create an illicit market. 

They argued that there is a high likelihood that the tax will result in South Africans using unlicensed offshore providers. 

Currently, gambling is taxed at a provincial level, with each province setting a specific rate that operators must pay. The new tax will be on top of these rates. 

“The submissions received generally recognised the need to address the growth of online gambling and its associated harm,” Godongwana said in the Medium-Term Budget Policy Statement. 

“Consultations are ongoing on the proposed tax design, its linkages to the existing regulatory framework, and the implications for provinces and the currently regulated market.” 

“An announcement of the final design will be made in the February 2027 Budget.” 

The revenue generated by the tax will go into the National Revenue Fund and will be split in the Budget as all other kinds of state revenue currently are. 

Axelson said the revenue may go to services such as healthcare, policing, education, and infrastructure. 

“Then, as I said, it can then put less pressure on other tax bases that we have. Maybe we won’t need to increase personal income taxes if we bring in a lot of revenue this way,” he said. 

Key questions for the new national tax are how it will be implemented, with Forvis Mazars’ Devakalyani Moodley saying it could be very complicated. 

 “From a complexity perspective, it might be easier to impose tighter regulations on the sector and put other systems in place rather than tax specific operators,” Moodley explained. 

“The key is how it will be implemented. Will it be implemented at an operator level at the standard tax rate? Is the Treasury going to impose a withholding tax? Or, will it not be on the gross gambling revenue, but based on turnover?”

Moodley said all of this is unclear at the moment, with the gambling industry pushing back on the National Treasury’s proposed tax. 

“SARS and the Treasury are going to need the cooperation and buy-in of licensed operators, banks, and payment platforms,” Moodley said. 

“It needs to be something that is coordinated by all individuals and not something that comes down with a heavy hammer.”