National campaigned on making offshore online casino operators pay gaming duty of 12 percent on gross betting revenue (file picture). Photo: 123RF
Inland Revenue predicts the government's plans to raise money from online casinos will bring in much less money than National had costed for in the campaign.
National campaigned on making offshore online casino operators pay gaming duty of 12 percent on gross betting revenue.
It predicted closing the loophole would bring in an average of $179 million a year over four years, or $719m in total.
But a Regulatory Impact Statement released by IRD predicted it would actually bring in $35m in its first year, rising by 5 percent a year - or about $145m in total.
It leaves National's costings more than half a billion dollars off what IRD is predicting.
The gambling tax is one of a suite of measures that made up National's Back Pocket Boost tax programme, and was designed to close a loophole offshore operators were able to exploit in a way casinos physically present in New Zealand cannot.
Next week, the coalition will bring in legislation which it says will deliver on its tax commitments.
The Amendment Paper to the Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill includes the restoration of interest deductibility for landlords, and the reduction of the bright-line test.
It will also remove depreciation deductions for commercial and industrial buildings.
"The next step will be to ensure ordinary New Zealanders can keep more of what they earn, by providing personal income tax relief in the May Budget," Finance Minister Nicola Willis said.
The government appears to have acknowledged the gambling tax will not bring in as much as it hoped. Cabinet has made an in-principle decision to bring in a regulatory regime for online gambling.
"Regulating online casino gambling will support tax collection, minimise harm and provide consumer protections to New Zealanders," Revenue Minister Simon Watts said.