IRISH Finance Minister Paschal Donohoe has resisted the urge to double taxes on betting following the threat of job losses from the bookmaker industry.
After considering numerous options put forward to his department, Donohue decided to leave the 1% rate intact, stating he would review the situation again before the 2019 budget.
The question being asked following the decision is did threats from the bookmaker industry surrounding job losses have an impact?
Reports emerged in recent weeks of multiple submissions made to the minister from the betting industry, warning of the ‘potential damages’ a rise in taxes would create, including job losses and the closure of smaller businesses and operators.
Ireland currently enjoys one of the lowest tax rates in the world for gambling companies. Pressure continues to mount on Donohue and the Federal Government to reign in the industry after significant legislative changes to
Donohue was said to be contemplating one of three options – doubling the 1% tax to 2%, introducing a new tax directly on punters and a tax on the gross profits of bookmaking firms.
How long will the Irish bookmaker industry get away with its low tax?
The age-old threat of ‘job losses’ may have worked this year, but it simply won’t fly when bookmaker profits continue to soar in the new year.
Ireland, like any country, does have to be careful and weigh up data from the effect of different gambling taxes around the world. The point of consumption taxes in Australia has been met with controversy so far, but could be a model Ireland uses.
While the most simple option will be a raise in the tax to 1.5 or 2% in 12 months time, the Government will be mindful of raising taxes on punters – any move that could potentially encourage people to take their business to cheaper, illegal bookmakers is a dangerous one that will hurt both the industry and the public.
We’ll be watching this space in the new year.