THE TOTALISATOR TAX

Hokitika Guardian, 30 July 1930, Page 7

THE TOTALISATOR TAX

: amount Of money available for investment and consequently the revenue to the clubs arid 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 reinvestment on the totalisator. '

PROTEST TO GOVERNMENT

TELEGRAPHING RETS

the;pcsition explained

f WELLINGTON, July 27. In view, of the proposal contained in the Budget' to increase the totalisator tax, Mr Q . S. Watkins, president of the Racing Conference, has sent the following telegram to the Prime Minister:

“Ori behalf of the racing, jockey, and hunt chibs “of New Zealand 1 desire to lodge /an.emphatic protest against the proposal'in the Budget to increase the totalisator’ tax by 2-J- per cent., as any such increase must result in diminished revenue..; !; beg to assure you that the considered opinion of the administrators pf racing is that the only safe channel through' which additional revenue can" bed.obtained . from the totalisator without ,/crippiling racing is to permit totaHsa'tqr investments to be telegraphed i ’ thei'dubs ,on race days . ,y r In,supporting liis protest the president /lnadei the following statement:—

BURDEN OF TAXATION

“I consider it absolutely necessary to draw attention to tlie burden of taxation which l ‘has been levied upon racing since 1920,Prior to the year 1910, the totalisatori' tax was 10 per cent., of which the Government received 1$ per cent.'arid'the clubs 8} per cent. Since 1910 various 1 special taxation under which racing'and trotting labours has been enibted.” ■ Mr,. Watkins then reviews the various measures ,'tpassed and recalls Mr Massey’s protriise iri 1924 to reduce taxation on racing.: The promise was not fulfilled owingto his illness and death. paid,’or payable, to the Government by racing clubs, not riicludingS'trotting clubs, during the rating yesr%;'just drawing to a close amountsjto £400,000,” says "Mr Watkins . i ‘ ‘Frequently /cases occur each year where yqlubs, although paying a large amountthe Goverenineiit in taxation make.a 1 sribritjji£,tiiil Joss ; rivet their rileet"’ ings and jconsequently a nmbeir of raceing clubs; have readied the stage when it ' has .virtp' be seriously considered whether can carry on under the special :forms {of taxation which, have been imposed' since 1910. ‘.‘As regards; the 'proposal ivjn;/ the Budget .the 1 amusement tax, * the racing.: clubs will have to accept an J additionah/burden which will be:• costly • to them. : i frhe.:.ainusement tax already [ paid by clubk on their .members’ subscriptionsis:i* aptrrt^fronr 5, the tax'phid on the'gate moneys. . : j “It has bpen stated that the proposed increase of'2fc per cent, in the totalisa- ' tor tax' '.wili^riot'; affect lihe .’clubs, but I am satisfied that ‘rake off’ of 3s 4d on tary poundinyested/on .the totalisa-, ;or can' •only , resultdri . diminishing she

“For many years racing and trotting authorities have been urging various Governments to repeal the Act which prohibits investments on the totalisator to be remitted to clubs on race days. Racing and trotting administrators com . scionciously believe such measure to be the only safe channel through .which .additional revenue can be obtained fir m the. totalisator without crippling racing, and trotting. “ft is generally understood that the Commissioner of Taxes collects income tax on the operations of illegal bookmakers. An analogy would be the keeping of an unlicensed hotel for the sale of liqour and the proprietor being mulcted from income tax. The bookmaker and unlicensed hotelkeeper are both conducting illegal businesses. “Surely such a state of thing is a travesty oh 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 consider the disastrous effect that further taxation on the totalisator would inflict upon a national pastime.

'■DETAILS OF THE TAXES

“In 1910 the totalisator tax was increased from per cent, to 2J per cent. The, same year the receipts tax of 2£-per-cent. iwas imposed upon the receipts of racing and trotting clubs. These receipts ' included gate money. In 1917 this tax was duplicated by the imposition of. the amusement tax. It was evident that the inclusion of racing and trotting clubs in payment of amusement tax was an oversight as gate .moneys' were already subject to the 2£ per .cent, receipts tax. This error, which cost,, the clubs close upon £SCSO annually, was not rectified until 1927 when the 2-J per cent, receipts tax was repealed as it was then recognised that the'’Clubs had been .paying a duplicate tax ;on the gate moneys for ten years. The idouble tax cost the clubs just upon : £50,b00.. " ; “In: 1915,.0ne per cent, was imposed upon stakes to cover racehorse owners’ income tax. The same year 21 per cent.: was imposed on dividends. “In 1916 -the clubs were called , upon to pay income tax, and it was not until 1923 that it was recognised they were overburdened with special taxation. When their liability to pay income tax was repealed in 1917, the amusements tax was imposed, duplicating the 1910 2f per cent, receipts tax. In 1921, the dividend tax was increased from 2£ per ’CSltt.’ to 5 per cent. and. the owners’ 's'takes tax from one per cent, to 10 per! cent. These two increases were agreed ■to 'by the clubs upon assurance of the then Prime Minister (the Rt. Hon. W. F. Massey) that it was a matter of expediency for racing and trotting clubs to provide extra . revenue' up to ;

£200,000 for two years only. .: This assurance is borne out by the fact that the 1921 Act contained a clause providing a limit of two years lor the operation of these increased taxes; !“1n;1924 the 10 per cent, stakes tax was reduced to 5 per cent., but not to one per cent, as formerly, and the dividend tax was fixed at 5 per cent., but not 2-J; per cent, as it was formerly.

AN UNFULFILLED PROMISE

'Mr Massey was fully alive to the desirability of reducing the taxation on racing, and t.olting and promised that it-should be attended to on his return from the- last Imperial Conference that be attended, but unfortunately his healtln was in such a state after'llls return that when lie was approached regard to the matter it was postponed. •Mr Massey passed away shortly after this and his promise has not been recognised. I venture to say that had Mr Massey’s promise been fulfilled the

racing and trotting clubs would not have objected to the extra tax being reimposed temporarily to-day to help meet the present requirements. In T’o, the clubs were granted a refund of the totalisator duty up to lj per cent on' the first £20,000 invested on the. totalisator, but not exceeding £250 to any club in any year and with restrictions as to how the refund was to be utilised.”