RACING TAXES

Bay of Plenty Beacon, Volume 4, Issue 143, 18 August 1941, Page 8

RACING TAXES

HUGE TOTAL TAKEN BY STATE

INVESTMENT' DEDUCTIONS

What the racing industry in its many ramifications brings the State in taxation may be gathered from the fact that on totalisator invest-* ments alone in the Dominion during the 15)40-41 season, which closed on July 31, the sum of £817,883 Avas paid by racing and trotting clubs. This huge sum accounts only for the "tote" tax and dividend tax on investments. Amusement taxes and Social Security taxes, the latter be--ing paid on Avages, salaries and fees would SAvell the total to seven fig' arcs. The experience of the Wanganui Jockey Club may be taken ar\ example. The club held six days' racing at AAvapuni and the totalisator investments for those six days amounted to £148,972. In totalisator tax the Government took 5 per cent of the total. Another 7*4 per cenl went to the club for the purpose of providing the stakes, and then the State tcok a further 5 per cent of the residue as dividend tax. Thus the State took £13,967 Is in its two slices from the attractive gilt-topped cake provided by investors. Amusement tax amounting to £414 10s 5d was pai<jl on admission charges, etc., and Social Security taxes, on jockeys' riding fees (£156 10s 4d), on Avages .and salaries (£222 12s 6d) SAA r elled the total by si further £434 16s 10d, Thus the Wanganui Jockey Glub collected £14,816 7s 5d for the State as i result of its activities during the season. Income tax, a recently-im-posed charge on operations, is net included in these figures.

No great stretch of imagination (s required to picture the results accruing from ekibs Avith running into far larger totals, such as the Auckland Racing Club, with its aggregate of £1,225,587 10's handled in fifteen days' racing, the Wellington Racing Club (£610,589) and Canterbury Jockey Club (£554,007). The taxation figures in alii respects are proportionately larger and go to Savcll the total of £817,883 mentioned earlier, and to AA'hich would have to be added amusement taxation on yuch attendances as Ellerslie's 30.000

or more patrons.

Tho deductions for taxation are easily ascertained, as after 12per cent of the total is taken (5 per cent for the State and 7% per cent for the club), the remaining 87Vis per cent of the total suffers a divided tax of 5 per cent. Of £100 invested on the totalisator £83 2s 6cl is ro> turned to the investors' in dividends.

On six occasions in the post-war years the eight-million mark has been exceeded in racing and trotting investments in New Zealand, but only twice has last season's £8,724,000 been exceeded, according to official records. Tn the 1919-20 season the total AA r as £8,792,570., and in the following season, 1920-21, the aggregate soared to the record figure of £10,121,212. A sium in excess of £8,000,000 was handled also in the years of 1921-G2 1924-25 and 1925-26. The betting barometer was steady for the next four seasons, but there was a sharp decline to £5,278,403 in 1930-31, and for the next three years the aggregate was under £4,000,000. The nadir of the post-war depression was reached in 1923-»33 with £3,678,251. Since then there has been a steady improvement, with the" past season's total nearly £5,000,000 above the loAvest depression aggregate.

The rule governing the provision of stake money from tlie clubs- percentage of the deductions from totalisator turnovers sets out that a club shall distribute in stakes a sum not less than 90 per cent of the average net totalisator revenue for the preceding three years l . By special dispensation from the Minister of Internal Affairs, a club, on the t'lea of financial stress, may secure permission to give in stakes a sum less than that stipulated in the regulations, but feAV clubs in recent years had sought such permission. The majority give stakes substantially in excess of the figures which they could justly claim as the limit of their resources, but such procedure is only possible because racing in New Zealand is conducted on non-proprietary lines, Avitli all profits going back to the oAvnersi of racehorses and the general public.