Key Moments:
- The South African government will delay its verdict on a 20% national online gambling tax until the February 2027 Budget.
- The tax proposal, initially revealed by National Treasury in November 2025, is still under consultation and faces ongoing criticism.
- Projections have indicated the tax could raise over R10bn annually, though officials emphasize revenue is not the main intent.
Extended Timeline for Online Gambling Tax Decision
South Africa’s government has confirmed that the long-awaited decision on a proposed 20% national levy on gross online gambling revenue will not be made until the February 2027 Budget. Finance Minister Enoch Godongwana announced this during the Medium-Term Budget Policy Statement on 21 October, clarifying that deliberations remain ongoing about how the new tax would operate within the country’s existing provincial gambling rules.
Details of the Proposed New Levy
The National Treasury first introduced the concept of a national online gambling tax in November 2025. The plan aims to establish a 20% levy on gross revenues from both online betting and interactive gambling activities. While the proposal has generally received support for addressing the swift expansion of online gambling, consultations continue regarding how the tax would integrate with the established regulatory environment and its broader implications.
Consultation and Industry Response
Finance Minister Godongwana stated, as reported by Daily Investor, “Consultations are ongoing on the proposed tax design, its linkages to the existing regulatory framework, and the implications for provinces and the currently regulated market. An announcement of the final design will be made in the February 2027 Budget.”
| Aspect | Details |
|---|---|
| Proposed Tax Rate | 20% levy on gross online gambling revenue |
| Current Provincial Tax Rate | Average 6% to 7% |
| Potential Annual Government Revenue | Over R10bn |
| Timeline for Decision | February 2027 Budget |
Debate and Criticism Surrounding the Proposal
Despite some support, the national tax initiative has met significant resistance following its initial consultation release in November 2025. The public commentary period, initially set to close on 30 January 2026, was extended to 27 February after multiple stakeholder requests for additional time.
A major point of contention centers on the double-layered taxation, as existing online gambling operators already pay provincial taxes ranging between 6% and 7%. The proposed 20% national levy would be imposed in addition to these existing charges, prompting concerns about negative impacts on the competitiveness of licensed operators and the potential movement of players to offshore gambling providers.
The Free Market Foundation previously described the tax plan as “a naked revenue grab that threatens the very existence of the legal gambling market” and highlighted apprehensions regarding its compatibility with South Africa’s constitutional framework, which prioritizes provincial authority in gambling regulation.
Revenue and Policy Intentions
While projections have placed the annual revenue potential at over R10bn, officials have asserted that the primary objective is not revenue generation. Treasury’s Christopher Axelson commented, “The way we look at this is that it is closer to a sin tax. The mechanism is not quite the same. It won’t be taxed like alcohol or tobacco on a per-drink or per-cigarette basis, but we are going to tax the companies,” he said. “We look at it like a sin tax. If there is a reduction in online gambling because of this tax, we would be happy with that, even if it reduces tax revenue.”
Despite the divided opinions, the Treasury continues to evaluate the tax’s framework, its relationship with existing provincial policies, and its impact on the domestic gambling market. The government has indicated that the issue will remain under review until the next significant update in February 2027.
- Author
Daniel Williams
