The Victorian Racing Industry (VRI), comprising Racing Victoria (RV), Greyhound Racing Victoria (GRV) and Harness Racing Victoria (HRV), has welcomed the Victorian Government’s decision to increase the Point of Consumption Tax (POCT) pass-through to the VRI in connection with an impending increase to the POCT rate.
The Victorian Government has today announced that following the passage of legislation, effective from 1 July 2021, the POCT on wagering by Victorian residents will increase from 8% to 10% of Net Wagering Revenue (NWR), bringing it into line with the POCT rate currently in place in New South Wales.
The Government has also announced that the VRI’s gross share of POCT receipts from wagering will be increased from 1.5% to 3.5% of taxable NWR. However, on a net basis, after the deduction of the VRI’s ‘make-whole’ obligation under the remaining term of the current Victorian wagering and betting license, the VRI expects to retain at least 1.7% of taxable NWR under the new POCT arrangements. This is comparable with the NSW racing industry which receives the full 2% industry share of taxable NWR in addition to other favourable wagering taxation arrangements.
Subject to the passage of legislation, the new POCT arrangements are expected to increase the VRI’s net receipts from the POCT by around $20 million per annum from 2021-22, as compared to the VRI’s expected net receipts under current POCT arrangements.
When introducing the POCT, the Victorian Government committed to the three codes of the VRI that they would be no worse off both individually and collectively under the new tax regime. The Victorian Government has also committed to maintaining the national pre-eminence of the VRI and its competitiveness against interstate racing.
The increase in the VRI’s share of POCT is an important step in closing the gap and addressing the relative Government funding differences between Victoria and New South Wales. Current favourable Government funding arrangements in New South Wales are enabling it to aggressively chase wagering market share and participation from Victoria, thus impacting industry funding, events and tourism.
This increase in funding will assist the industry to fund its operations and support jobs across the state, and also to continue to maintain its investments in prizemoney, important animal and participant welfare initiatives, and the development and maintenance of world-class racing and training facilities and infrastructure.
The VRI is one of Victoria’s most significant industries and makes a substantial contribution to jobs, communities and the state economy. It delivers $4.34 billion in economic value each year – around half of this in regional Victoria – and supports over 34,000 full-time equivalent jobs.
GRV Chair Peita Duncan welcomed the planned changes to the POCT revenue sharing arrangements with the VRI.
“These arrangements will assist in ensuring Victorian greyhound racing continues to be the premium greyhound racing jurisdiction in the world. This will assist us to continue to increase prizemoney to our participants, as well as allowing us to further invest in animal welfare and safe racing initiatives,” Ms Duncan said.
“GRV’s share of this increase is expected to equate to around $3.5 million in additional revenue in the 2021-22 financial year.
“Increasing returns to our participants is a priority for us going forward, as is safe racing with new and upgraded tracks to provide safe workplaces for our dogs, modernising the way we, and our clubs, do business, and of course protecting the ongoing integrity of our sport.
We expect prizemoney returns to participants to be more than $51 million in 20-21 and we will boost that as much as we can in coming years off the back of any increase in revenue.
We thank the Victorian Government for their ongoing support to our industry.”
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