UK Tax On Online Casinos May Increase
Officials in the United Kingdom plan to increase a point of consumption tax for online gambling platforms to become effective in the early part of 2019. The move is in response to critics who say that more aggressive taxes need to be imposed on casinos online to fund treatment for individuals that show themselves to be problem gamblers.
The present POC tax is 15 percent which many critics feel is too low. Industry insiders have wondered allowed if the move by the UK government is intended to be a way to pacify critics that were angry to learn that a decreased maximum betting limits for betting terminals will not be seen until the year 2020.
The United Kingdom first instituted the Point of Consumption tax back in 2014 as a way to tax online gambling platforms located in other countries but generating revenue in the UK. It is common practice for British companies in the industry to headquarter their businesses in other jurisdictions to lower their cost of operations and pay lower tax rates.
Many online gambling platforms have complained that the increase in POC taxes will force them to make a series of moves that will decrease the profitability of their businesses.
The controversy over the POC tax grows larger when taken into consideration that critics of the British Government allege that the Treasury Department was only assuring that a decrease in government revenue did not take place as a result of lowering the betting limits on gambling terminals. Gaming companies lament that they are being twice punished due to the lower betting limits along with the increase in tax responsibility.
There is no definite timeline for either the increase in POC taxes or the decreased maximum betting limits. However, The Treasury expects that tax increase to be executed no later than the spring of 2019 and betting limits to be lowered by April of 2020. Experts on the economy of the industry suggest that the extended rollout is with the intent to minimize the negative impact on businesses and protect the jobs of casino workers.
Professionals in the online gambling industry feel that regardless of the actions on the part of the UK government, the expenses, taxes included, will inevitably be passed along to the patrons of online casinos. One way experts say this could occur is by casinos implementing higher taxes and fees on players at the time of a cash out request. They cite the taxes on online gambling payouts that are paid by players in both France and Spain that were implemented in response to higher rates of taxes being assessed on institutions of gaming.