TOTALISATOR TAX

Dominion, Volume 23, Issue 258, 28 July 1930, Page 10

TOTALISATOR TAX

What the Sport Pays OFFICIAL PROTEST Telegraphing Money to Course The Budget imposition of an additional 2 J per cent, totalisator tax (making 12J per cent.) 1* the subject of an official protest by the president of the New Zealand Racing Conference (Mr. O. S. Watkins). Mr. Watkins has sent the following telegram to the Prime Minister (Hon. G. W. Forbes): — “On behalf of the racing, jockey and hunt clubs of New Zealand I desire to lodge an emphatic protest against the proposal in the Budget to increase the totalisator tax by two and one-half per centum, a* any such increase must result in diminishing revenue. I beg to assure you that the considered opinion of the administrators of racing Is that the only safe channel through which additional revenue can be obtained from the totalisator without crippling racing is to permit totalisator investments to be telegraphed to club* on race days.’’ In supporting his protest Mr. Watkins made the following statement:— I consider it absolutely necessary to draw attention to the burden of taxation which ha* been levied upon racing since 1910. Prior to the year 1910 the totalisator tax was 10 per cent., of which the Government received 1J per cent, and th* clubs 8J per cent. How Taxes Have Increased. Since 1910 the special taxation under which racing and trotting labour ha* been enacted as foUows:— In 1910 the totalisator tax was Increased from 14 per cent, to 2J per cent The same year a receipt* tax of .2} per cent, was imposed upon the receipts of racing and trotting clubs; these receipts included gate money. In 1917 this tax was duplicated by the Imposition ot the amusement tax. It was evident that the Inclusion of racing and trotting clubs In the payment of the amusement tax was an oversight, a* gate moneys were already subject to the 24 per cent, receipt* tax. This error, which cost the club* close upon £6OOO annually, was not rectified until 1927, when the 2i per cent, receipts tax was repealed as It was then recognised that the clubs bad been paying a duplicate tax on gate moneys for 10 years. The double tax cost the club* just upon £50,000. In 1915 1 per cent was Imposed upon stakes to cover racehorse owners' income tax. The same year 24 per cent was Imposed on dividends. In 1910 clubs were called upon to pay income tax, and It was not until 1923 that It was recognised club* were overburdened with special taxation, when their liability to pay income tax was repealed. In 1917 the amusement tax was Imposed, duplicating the 1910 2j per cent, receipt* tax to which I have already referred. In 1921 the dividend tax was Increased from 24 per cent, to 6 per cent., and the owners’ stakes tax from 1 per cent, to 10 per cent. These two Increase* were agreed to by the clubs upon the assurance of the then Prime Minister, Mr. Massey, that It was a matter of expediency for racing and trotting club* to provide extra revenue up to £200,000 for two years only. Thl* assurance Is borne out by the fact that the 1921 Act contained a clause providing a limit of two year* for the operation of these Increased taxes.

In 1924 the 10 per cent, stake* tax reduced to 5 per cent., but not to 1 per cent, a* formerly, and the dividend tax wa* fixed at 5 per cent., but not 24 per cent, a* It waa formerly. The late Hon. W. F. Massey was fully alive to th* desirability of reducing taxation on racing and trotting, and promised that It should be attended to on hl* return from the last Imperial Conference that he attended, but, unfortunately, hla health was In *uch a state after his returji that when he was approached In regard to the matter It was postponed. Mr. Massey passed away shortly after thia, and his promise ha* not been recognised. I venture to say that! had Mr. Massey « promise been fulfilled, racing and trotting clubs would not have objected to this extra tax being re-lmposed temporarily to-day to help to meet the present requirement*. In 1925 clubs were granted a refund of totalisator duty up to 11 per eent. on the first £20.000 Invested on the totalisator, but not exceeding £250 to any club In any year and with restriction* as to how the refund was to be utilised. (

58400,000 a Year.

The taxation paid or payable to the Government by the racing clubs, not Including trotting clubs, during the racing year Just drawing to a close amounts to £400,000. Frequently cases occur each year where clubs, although paying a large amount to the Government In taxation, made a substantial loss over their meetings, consequently a number of racing clubs have reached the stage when it has to be seriously considered whether they can carry on under the special forms of tax“' tlou which have been Imposed since 1910. As regards the proposal in the Budget to Increase the amusement tax, racing clubs will have to accept the additional burden, which will be costly to them. The amusement tax already paid by clubs on the r members’ subscriptions is considerable apart from the tax paid on gate moneys. It has been stated that the proposed increase of 2A per cent, in the totalisator tax will not affect the clubs, but I am satisfied a rake off of 3/4* on every pound invested on the totalisator can only result in diminishing the amount of money available for Investment; consequently the revenue to the clubs and the Government must decrease. It must not be overlooked that the Government taxes of over £500,000 per annum already taken from racing and trotting go into the Consolidated Fund, and does not come back Into circulation for re-investment on the totalisator.

Telegraphed Investment*.

For many years the racing and trotting authorities hare been urging the various Governments to repeal the Ant which prohlblts Investments on the totallsator to be remitted to clubs on race days. The racing and trotting administrators conscientiously believe such a measure to be the only safe channel through which additional revenue can be obtained from the totallsator without crippling racing and trotting. It is generally understood that the Commissioner of Taxes collects Income tax on the operations of the illegal bookmaker; an analogy would be the keeping of an unlicensed hotel for the sale of liquor and the proprietor being mulcted for Income tax: the bookmaker and the unlicensed hotelkeeper both conducting Illegal businesses. Surely such a state of things is a travesty on the law, and should not be permitted by our legislators. I earnestly appeal to our legislators and to all concerned In the welfare of racing to seriously consider the disastrous effect that any further taxation on the totallsator would inflict upon a national pastime.

Southern Opposition By Telegraph.—Press Association. Invercargill. July 26. At the nnntinl meeting of the Sotrlilnnd Racing Club this evening reference was made to the proposed increase in the “tote” tax, mid a motion of protest against; the increase, and n request for the removal of the restrictions against the publication of dividends and the wiryy; ef mosej? t© racecourses was carrietL,