By Evan Pickworth

In an interesting turn of events in the Budget on Wednesday, the Receiver announced a 15% withholding tax on gambling winnings over R25,000, with the likely outcome that casinos will collect the taxes.

Vedika Andhee, Human Capital, PAYE, Due diligence, Share Schemes and Exchange Control expert at Ernst & Young, says it looks like the only way to control this would be for casinos to collect the taxes, effectively operating as agents of SARS.

Famous gangster and gambling house owner Al Capone would be turning in his grave at the prospect - Capone of course was nailed for tax evasion rather than his other many presumed crimes.

Lotto winnings also fall into the ambit of the new tax, as this is viewed as constituting gambling. Andhee feels that even radio give-outs could be included. "They need to define what gambling is," she says.

Generally these winnings are viewed as capital, so in effect SARS is using the new change to rake in a little more for itself.

Source: I-Net Bridge