Private lottery duty rate
The private lottery duty rate is 30%.
Find out more on:
How to calculate duty for fruit machines
Private Lottery Duty is payable on the total amount accruing from the operation of a fruit machine. This amount is obtained by adding 37.5% to the amount found in the cash box of the machine at the time of each clearance (to approximate the machine's "deemed turnover"). If the club or society is GST-registered, the amount of GST chargeable on the operation of the fruit machine will be deducted from this "deemed turnover". 30% duty is then paid on this net amount.
| Example 1: Computation of Private Lottery Duty for a club or society that is GST-registered |
|
S$
|
|
| Cash box collection |
19,000.00 (A) |
|
| Add: 37.5% x (A) |
7,125.00 |
|
| Deemed turnover |
26,125.00 |
|
| Less: GST Chargeable* |
588.79 |
|
|
25,536.21 (B)
|
|
|
|
|
| Private Lottery Duty payable (30% x B) |
7,660.86 |
|
|
|
|
| *Computation of GST Chargeable |
|
|
| Cash box collection |
19,000.00 |
|
| Less: Hand Pays / Cancelled Credits |
10,000.00 |
|
| |
9,000.00 (C) |
|
| |
|
|
| GST Chargeable (7/107 x C) |
588.79 |
|
| Example 2: Computation of Private Lottery Duty for a club or society that is not GST-registered |
|
S$
|
|
| Cash box collection (actual) |
19,000.00 (A) |
|
| Add: 37.5% x (A) |
7,125.00
|
|
| Deemed turnover |
26,125.00 (B) |
|
|
|
|
| Private Lottery Duty payable (30% x B) |
7,837.50 |
|
How to calculate duty for other types of private lotteries
Other types of private lotteries refer to lotteries not connected with operating fruit machines. Examples: Tombola and lucky draws.
- For a club or society that is GST-registered, the amount of GST chargeable# will be deducted from the total amount of collection from the lottery. Multiply this net figure by 30% to get the amount of duty payable.
- For a club or society that is not GST-registered, multiply the total amount of collection from the lottery by 30% to get the amount of duty payable.
#To calculate the GST chargeable (GST rate: 7%), deduct the amount of cash winnings (excludes prizes-in-kinds) from the total amount collected from the lottery. Then, multiply the result by the fraction 7/107.
New basis for computing private lottery duty on fruit machines
It was announced in the 2006 Budget Statement that the basis of computing private lottery duty for fruit machines will be changed from 30% of deemed turnover to 12% of actual turnover. The intention of this change was to leverage on the advancement in fruit machine technology.
Since the announcement, the Ministry of Finance (“MOF”) has received numerous feedback from various clubs on concerns of a higher effective tax rate under the new tax basis. To take into account the clubs’ feedback, MOF has decided to delay the implementation of the new basis of computing duty on actual turnover until a further review of the framework for computing private lotteries duty is completed. We are aiming to complete this review by the first quarter of 2011. We will announce more details when the review is completed.
In the meantime, the current basis of computing duty based on 30% of deemed turnover will continue to apply. Since Nov 2007, clubs or societies had to ensure their fruit machines comply with certain requirements (e.g. Minimum Standardised Meter Readings). These requirements remain unchanged as, going forward, fruit machines will be taxed based on the actual readings taken from the meters.
More details will be announced when the review is completed. Ample lead time will be given to the clubs to prepare for and operationalise the new basis of computing fruit machine duty.
Gathering of information for the review
Clubs would have received a letter from IRAS requiring you to provide some information to facilitate the review process. You can download the Annexes 1 and 2 (25KB) to enter the required information and submit them with the supporting soft-meter printouts to IRAS.
Learn more on:
Minimum standardised meter readings & other requirements
Clubs or societies have to ensure that their fruit machines comply with the following with effect from 1 Nov 2007:
- All machines must have 4 hard meter readings^:
- Turnover
- Total Wins
- Money In
- Money 0ut
- All machines must have 12 soft meter readings^:
- Games Played
- Turnover
- Total Wins
- Hand Pays / Cancelled Credits / Attendant Pays
- Coins In
- Coins Out
- Coin Drop
- Banknotes In
- Total Cashless In
- Total Cashless Out
- Money In
- Money Out
- All machines should be able to provide printouts for the soft meters specified above. These printouts must be legible and maintained for 7 years.
- All machines will cease play or shut down automatically once hard meters are disconnected and/or become faulty.
There are some cases where Inland Revenue Authority of Singapore (IRAS) has decided to grant an exemption from the above requirements. Refer to the FAQs below for details.
^For the definition of the meters, download Minimum Standardised Meter Readings from Machines (60KB)
Computing private lottery duty on fruit machines under the new basis
Currently, private lottery duty is calculated based on the machine's deemed turnover. Under the new basis, the duty will be calculated based on the machine's actual turnover^, as per the machine's meter reading.
Further details on the new rate of duty and implementation date will be published in IRAS' website at a later date.
^For the definition of the term, refer to Minimum Standardised Meter Readings from Machines (60KB)
FAQs
No, all fruit machines operated by clubs or societies must be equipped with 'Turnover' and 'Total Wins' hard and soft meter readings from 1 Nov 2007.
Yes, if the machines only accept coins during play, i.e. they must not accept other forms of wagering instruments such as dollar bills and/or credits that are transferred electronically. Consequentially, the printouts for these soft meter readings will not be required.
No, all fruit machines, whether new or reconditioned, installed by the clubs or societies from 1 Nov 2007 must be fully compliant with the required Minimum Standardised Meter Readings set by IRAS.
Yes, provided that the existing machine only accepts a single denomination, i.e. the dollar equivalent can be derived by multiplying the credits shown on the printout against the denomination value. If the club or society decides to change the value per credit, it has to inform IRAS and print out the meter readings before and after the re-configuration. All fruit machines acquired by the clubs from 1 Nov 2007 must be fully compliant with the required meter reading printouts.
We recognise that machine manufacturers may term their hard and soft meters differently. As long as the definitions of the machine's hard and soft meter readings are the same as those provided by IRAS, they can be accepted. In the above scenario, we recommend that the club or society retain a written confirmation from the supplier that 'Cashbox (In)' has the same definition as 'Coin Drop' in the Minimum Standardised Meter Readings required by IRAS. We may request for such confirmation when necessary.
Yes, your club or society will be allowed to continue to operate such machines beyond 31 Oct 2007. Nonetheless, all fruit machines, whether new or reconditioned, installed by the clubs or societies from 1 Nov 2007 must be fully compliant with the required Minimum Standardised Meter Readings set by IRAS.