Want to start and promote a betting business? Before you go ahead, you need to know all about the relevant IRAS taxes that are applicable to such a business.
To start a betting or sweepstakes business, you’ll first have to get an exemption. After a thorough examination of your application, if you’re found to be eligible, an exemption will be granted by the Minister of Home Affairs (MHA).
The exemption will be granted to you under the Common Gaming Houses Act or the Betting Act. After the Ministry of Home Affairs has awarded you or your organisation an exemption under the aforementioned act, the new development has to be gazetted by the Minister of Finance. It will be published and recorded in the Betting and Sweepstake Duties Order.
According to the IRAS Singapore, the government has decided to regulate betting and sweepstakes activities with the intention to prevent proliferation. Placing bets with unauthorised agencies is strictly prohibited and punishable under law.
Yes. Income generated through betting/sweepstakes activities will be subjected to taxation by IRAS. It is governed by a law called the Betting and Sweepstake Duties Act.
As discussed already, the Betting and Sweepstake Duties Act gives IRAS the authority to collect taxes on approved betting activities. Under the scope of this act, taxes can be levied on the following activities:
IRAS uses different methods of tax computation depending on the type of betting activity. Here’s what you need to know about them:
GST = 7/107 x (Money collected on bets - Winnings distributed among winners)
Let us assume that S$10,000 was raised in a sweepstake activity and S$4,650 was paid in winnings. Then the GST applicable would be S$350 [(7/107x(10,000-4,650)]. The tax the promoter will have to pay on the earnings from this sweepstake will be S$2,895 [30/100x(10,000-350)].[Disclaimer: The numbers used in the example above are purely for illustrative purposes and may bear no resemblance to actual results.]
Under the Betting and Sweepstake Duties Act, a promoter is the secretary of an association that is promoting a particular betting activity. At present, Singapore Pools (Private) Ltd. and Singapore Totalisator Board are authorised promoters in the country.
Yes, the promoters will have to submit the following to IRAS periodically:
Depending on the type of authorised betting activity, you’ll have to submit a valid statement and pay taxes as follows:
|Betting Type||Maximum Permissible Period for Filing Statement|
|Sports betting||Within 15 days of the event|
|Betting on horse racing using pari-mutuel||Within 15 days of the last day of the race|
|Sweepstakes||Within 15 days of the determination of winners|
|Other types of betting||Within 15 days of the draw date|
[Note: IRAS may, at its discretion, extend the deadline of filing a statement/paying the tax dues.]
IRAS may impose penalties if the following anomalies are detected:
IRAS reserves the right to impose a fine on any promoter if it detects fraud. If you (the promoter) try to defraud IRAS by submitting a false statement or by failing to submit a valid statement, you’ll be liable for conviction. The conviction could be in the form of a fine.
The fine could go up to 4x the amount of duty payable, subject to a minimum of S$1,000. If IRAS so decides, it could compound the offence and levy a fine equal to double the amount of duty payable, subject to a maximum of S$5,000.
If you fail to submit a valid statement within the due date, you may be liable for a fine of up to S$500. If IRAS decides to compound your offence, it can impose a fine of up to S$250. To stay on the right side of the law, make sure that you acquaint yourself with the relevant rules. It would help you grow your business legally and without upsetting IRAS.