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Silvia Pavlof December 6, 2023 2 min read
Spelinspektionen Weighs In on Sweden’s Proposed GGR Tax Adjustment
Increasing the GGR tax from 18% to 22% is deemed a suitable approach to bolster government funding without causing substantial effects on companies or the overall tax base
Spelinspektionen, the Swedish gambling authority, has responded to the Swedish government’s proposal for a 4% increase in the Gross Gaming Revenue (GGR) tax, expressing no substantive views but emphasizing the need for careful monitoring of market developments.
Government Aims for Fiscal Boost without Disturbing Market Stability
The proposal, introduced in September, aims to raise the GGR tax rate from the current 18% to 22%, revisiting the initial taxation set when the market underwent re-regulation in 2019. The rationale behind the initial 18% tax rate was a precautionary measure to foster market growth.
Now, as channelization stabilizes and government revenues require a boost, the Swedish government is considering the tax hike.
Raising the GGR tax from 18% to 22% is considered an appropriate measure to enhance government funding without significantly impacting companies or the overall tax base.
The proposal is set to be presented to parliament in the spring of 2024, with potential implementation starting from July 1, 2024, pending approval.
Spelinspektionen, in its response, acknowledged no major objections to the proposed tax increase but highlighted potential repercussions. The regulator stated that they observe the possibility of an impact on the channeling rate due to an increase in the tax on gambling, among other factors.
Spelinspektionen Raises Alarm on Gaming Industry Downturn
Drawing attention to recent market trends, Spelinspektionen pointed out a downturn in total market turnover over the past two quarters, particularly impacting license holders. This decline, according to the Swedish regulator, could indicate changes in the gaming market that might lead to a reduced tax base. However, uncertainties persist regarding whether this downturn is a temporary setback or a more permanent shift.
In September, when the proposal was first introduced, BOS, the Swedish Trade Association for Online Gambling, criticized the government’s lack of understanding of the market’s vulnerability.
Gustaf Hoffstedt, the Association’s secretary general, stated that the government’s announcement is deeply disappointing, emphasizing the need for a better understanding of the market they govern.
Hoffstedt further highlighted concerns about the market’s channelization rate, which currently stands at approximately 77% but drops to as low as 72% in certain verticals like online casinos. He noted a declining trend in channeling over time. The secretary-general predicted that if the proposal is approved, channelization will continue to decrease, potentially reverting to the rate recorded in 2019, which was considerably lower than the targeted 90%.