Planned 25% tax for online gambling in Portugal
While the Portuguese government contemplates a standardized 25% tax rate for online gambling earnings, the intention is to gain more income from this flourishing industry. Presently, the tax rates have been based on a complex scale system.
As part of their budget plans for 2019, Portugal is deliberating the restructuring of its thriving online gambling market. The Portuguese Ministry of Finance is weighing the prospect of a flat 25% tax on all revenue from online gambling in the future, thus abolishing the present 'sliding scale system' that varies on turnover and gaming type.
Presently, Portugal's online gambling service providers pay taxes in installments, scaled according to turnover volume and type of gambling. With online poker and online casino games, the rates are between 15 and 30 percent, while sports betting is taxed at 8-16 percent. This system has faced criticism from industry representatives, as many claim to be disadvantaged due to the disparate taxation system in the past.
Yet, the motivation for uniform taxation appears to hinge more on the booming revenue of the sector. According to Portugal's gambling regulator SRIJ, the online gambling sector is witnessing substantial growth across the board. The FIFA World Cup (June 14 to July 15) resulted in a startling increase in sports betting turnover, soaring from €13.9m to €20.5m. Soccer matches accounted for 74.4% of all sports bets. In tandem, 100,000 new customers were acquired by local bookmakers in H1 2018.
Concurrently, the online casino market in Portugal is also flourishing - turnover increased by €5.4m, totaling €16.8m. Online slots generated the highest earnings. Furthermore, the online poker category registered a 20.4% growth in sales.
Flat tax rate comparatively high in Europe
Keep in mind that a 25% tax rate would be high compared to other European nations. German sports betting tax amounts to a meager 5%, and Ireland's only charges 1%. In the UK, where the industry is heavily regulated, online tax hikes from 15% to 20% are under discussion. The Portuguese business newspaper Jornal de Negocios issued a cautionary warning to the government not to rashly modify the existing conditions, as it might dissuade suppliers.
Instead of immediately adopting this uniform tax rate, voices advocate for a revision of the online licensing system to pair with the establishment of a government-supported start-up. To retain operators, it has been emphasized that this flat tax is only a proposal and the final 2019 budget document is still susceptible to change. Hence, whether this drastic transformation in tax rates eventuates remains uncertain.
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Source: www.onlinecasinosdeutschland.com
