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NZ parties clash over offshore gambling revenue

| By Richard Mulligan
New Zealand’s two leading political parties have engaged in a war of words over offshore gambling revenue ahead of the forthcoming general election.

The New Zealand Labour Party – currently in government – has hit back at National Party claims it will fund its spending plans in part by forcing offshore gambling operators to pay more in tax should it be elected. The election is to be held on 14 October.

Introducing its NZ$14.6bn ($8.7bn/€8.0bn/£6.8bn) tax relief plan, National contended it can raise NZ$179m per year from offshore operators.

National Party deputy leader Nicola Willis said this would be done by “closing a tax loophole and ensuring offshore operators delivering online gambling to New Zealanders, pay tax.”

Willis told reporters that the goods and services tax (GST) is not currently being collected from the entire black market. National would force online casino operators to register and report their earnings.

Services that did not comply would be affected by IP geoblocking. Willis also said her figures include additional corporate taxes and casino fees.

Labour slams National Party’s estimates

Labour said estimates of the size of the market are based on studies by TAB and Lotto. It added that GST raises less than NZ$40m per year.

Barbara Edmonds, Labour’s revenue and internal affairs spokesperson, said: “Contrary to National’s fiscal plan, there is no ‘tax loophole’ on online gambling from offshore.

“We also challenge National to provide the costings for the claim that an average of NZ$179m per year could generate revenue of NZ$716m over the forecast period.

“As [National’s revenue spokesperson] Andrew Bayly knows, in the seven years since GST has been collected, only a total of NZ$170m has come from online casinos.”

New Zealand has collected GST at a rate of 15% on services and intangibles supplied remotely by an offshore supplier since October 2016. Among those charged are remote gambling service providers who make more than NZ$60,000 annually from New Zealanders.

New Zealand gambling policy

Labour’s racing spokesperson, Kieran McAnulty, also said that National’s fiscal plan risks double-counting other revenue currently raised from offshore operators.

“Offshore platforms who offer gambling on sports and race fixtures currently pay a point of consumption charge of around NZ$4m per annum, that is returned to the sports and racing codes in New Zealand for community benefit and harm minimisation efforts,” McAnulty said.

“It is sad to see that National is not making any provision for harm minimisation work to address problem gambling in their plan for taxing offshore platforms. They also need to clarify if their plan means the community and sports funding will now be scrapped in order to pay for tax cuts.”

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