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Gaming machine tax to raise $8m from 75 South Australian clubs

About 75 South Australian clubs could face an $8 million tax increase on gaming machines under proposed tax reform.

The State Government has released a discussion paper looking at ways to overhaul SA's tax system.

It also proposed a broad-based land tax of about $1,200 a year for a median value property in the place of stamp duty, overhauling payroll tax by removing lower rates and exemptions, and the abolishment of insurance taxes.

Clubs SA chief executive Mike Penfold said the majority of clubs were already struggling to make ends meet and the reform on gambling tax could push them over the edge.

He said it would decrease the amount of money clubs could put back into the community.

"Obviously, if the tax goes up, we have less money for our clubs and the clubs can't distribute that money to its members and to the community itself," Mr Penfold said.

The Government was also looking at the option of taxing online gambling at the "place of consumption" rather than the "place of supply".

Treasurer Tom Koutsantonis said the Government had no "preferred option" for reform at this point but was open to discussion.

The Government said it was looking at overhauling the tax system due to "pressures" the economy was facing due to the closure of the car industry and other manufacturing areas.

It also wanted the taxation system to better fund the health and education sector.

Land-based tax to raise nearly $1 billion

The proposed land-based tax would either replace or reduce stamp duty on property sales, which is a one-off payment of about $16,830 at the time of purchase on a median valued property of about $410,000.

In 2013-14 there were 47,000 property sales from a total 787,500 private properties in SA, meaning the Government made about $791 million in stamp duty (median value estimation).

If that stamp duty was replaced with an annual tax of about $1,200 on every private property in SA, the Government would raise about $945 million.

"The important point is, if you did go down the broad-based land tax model you would have to have exemptions in place for people who have purchased a property recently," Mr Koutsantonis said.

"We're just showing people if you wanted to go down this path and remove conveyance duties off the family home or off properties, this is the potential impact on the median price home. We're not saying we're going to do it, we're saying this is the modelling."

Real Estate Institute of SA chief executive Greg Troughton did not like the plan but said the proposal would have no impact on the property market in the short term.

"As with anything when it comes to policy, we will be stressing to our members this isn't in fact government policy," he said.

"This is just an options paper and when it comes to major taxation reform like this, we're talking many many years."

Mr Troughton said it was hard to believe any government would put further land tax on top of council rates and the recently increased Emergency Services Levy.

"I think that the days of property being a cash cow for governments are coming to an end," he said.

The Government is expecting to raise $4.4 billion in state taxation revenue in the 2014-15 financial year, of which $1.147 billion will be raised through payroll tax and $886 million through stamp duty.

Gambling taxes will raise $394 million and insurance taxes $445 million.

Private land taxes will raise an estimated $347 million and public land tax $216 million.

Public submissions on the State Tax Review Discussion Paper are open until April 10.