Amid major regulatory upheavals across Europe and the gambling industry, some good news finally come from Portugal where the government has reportedly dropped its plans to rev up gambling taxation to 25% this year as part of a budgetary assessment meeting.
Will Portugal Scrap Plans for 25% Tax on Gambling?
Rumors have intensified following a report last week that Portugal’s government had decided not to push ahead with a planned budgetary move that would have seen the flat tax rate on online gaming products would become a fixed rate at 25%. This would have been a killing blow for many of the operators in the country and it’s certainly a very visible danger all over Europe.
In the United Kingdom, British Chancellor of the Exchequer Phillip Hammond will attend a budget meeting on Monday, October 29 which may lead to an increase in the overall tax imposed on gaming revenue by additional 5% to 10%. This is a development that many of the local operators fear truthfully. Despite the strong growth in revenue, it would be rather easy to tackle the subtle balance in the United Kingdom.
Portugal employs a scale to accurately tax its operators which allows gaming minnows to survive and actually compete with the big fish. However, there were rumors that the government may finally be getting tired of keeping track of revenue and using precious resources to accommodate the industry, considering instead a flat tax that would make matters simple.
The benefits of such a move are quite visible, as it will cut the redtape and also the administration’s time and efforts allocated to tracking taxes. But put it too low and big operators will have a field day. Conversely, rev the rate all the way to 25%, and then you will see a lot of the present operators succumb and disappear.
RGA’s Take on the Matter
Much like in the United Kingdom Portuguese legislators are actually going to have a budget meeting which is now scheduled for November 30 and it will gather all legally responsible parties. Similarly, the Remote Gambling Association (RGA) has expressed hopes that this will effectively formalize the cancellation of any plans to introduce a flat tax on gambling.
Nevertheless, RGA also considers a common tax threshold to be a good thing. However, the organization is also aware that trying to debate gambling taxes during a budget meeting would be counterproductive and it could ultimate hurt any meaningful reform.
With this in mind, the RGA has said that it would like to see the topic put back for discussion once the budget details have been cleared. Not everyone is happy about the state of taxation across Europe either.
As mentioned before, the fallout of the FBOTs legislation in the United Kingdom is finally having adverse effects on how matters are run in the country. Trying to squeeze out more money out of operators when some of them are on the cusp of having to eke out a living doesn’t bode well for business.
And while Portugal and the United Kingdom may seem like countries in trouble, Ireland’s own business entities are trying to fight a 2% revenue tax and reverse it back to its 1% levels.