New national tax looms over South Africa

South Africa extended the deadline for public comment on a proposed 20% online-gambling tax due to requests for more time.

The National Treasury moved the final date for comments on a discussion paper it published last year to 27 February from 30 January, it said in a statement on Thursday.

The proposed tax is a response to the rapid rise of online gambling in Africa’s most industrialised nation. Data from the National Gambling Board show that about R1.5 trillion was wagered in South Africa in the 2024–25 financial year, almost one-third more than during the previous financial year.

“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” the National Treasury said in its discussion paper published late last year.

While the proposed tax could generate about R10 billion in additional revenue, its main purpose is to “discourage problem and pathological gambling and their ill effects,” the Treasury said.

The proposal seeks to address the steep rise in online gambling in South Africa, driven by widespread smartphone use and deepening economic hardship in a country with one of the world’s highest unemployment rates.

The trend has intensified calls for the government to establish a stronger regulatory framework to manage the industry’s growth and limit its social impact.

Gambling participation rose to 65.7% by end-2023, from 30.6% in 2017, with the National Lottery and online sports betting the most popular forms.

Most gamblers were young adults aged 25 to 34, while Mpumalanga, the Western Cape, and Gauteng provinces accounted for more than 80% of total turnover. 

The move mirrors global trends. The UK taxes remote gaming at 21% of gross profit and is consolidating remote levies and New Zealand introduced a 12% offshore duty on online gambling profits. 

Other measures under consideration include requiring local online betting operators to register and provide the nation’s tax agency with the same information they currently submit to provincial gambling boards for revenue collection.

“This should ease administration and industry compliance,” the Treasury said.