Czech Finance Ministry Proposes Gambling Tax Hikes

As announced by the Ministry of Finance of the Czech Republic, lawmakers from this country are planning on increasing the amount of taxes…

…so games like bingo, live games and lotteries are going to go through major changes.

At the moment, gaming machines are taxed at 35% of total gaming revenue, while all gambling taxes in the Czech Republic are at 23% of gross gaming revenue.

New Tax Plans

So, if the government’s plans go through, it has been announced that current tax rates for lotteries, live games and bingo would jump to 30% of the revenue…

…while other types of gambling like fixed-odds betting would face just a tiny increase from 23% to 25%.

Also, the plan is to leave the current 35% tax rate for gaming machines unchanged.

If the proposals get approved, they won’t take effect until January 2020. There will probably be included tax hikes for both tobacco and alcohol sectors.

The Ministry noted that their only intent with this increase is to raise public budget. The tax-changes submission stated by the Ministry said:

“The proposed amendment to the gambling tax law divides the rate of gambling tax into three levels, according to the harmfulness of individual gambling in the same way as the government’s draft Gambling Tax Act of 2015.”

Criticized by Other Politicians

The new tax plans from Czech lawmakers have caused a lot of criticism from some of the state politicians in the country’s Chamber of Deputies’ lower house…

…including Miroslav Kalousek, the former leader of the KDU-CSL and TOP 09 parties who has twice served as the government’s Finance Minister.

A Word from Miroslav Kalousek:

“We can divide the word ‘gambling’ into socially acceptable activities and addiction,” Kalousek said.

“There is a big difference between slot machines and a bunch of employees in a workplace contributing towards a ticket.

“For lotteries, I would leave the rate of taxation at the current level. I consider the increase to 30% to be absolutely disproportionate and unnecessary,” he added.

Different Opinions

One more politician, Jan Volny, who is actually the vice-chairman of the ANO 2011 political party, which has 78 seats in the house…

…said that he would “agree with a slight adjustment, but 30% is a lot and could be counter-productive in collecting taxes.”

“Personally, I am a little worried not to overdo it and avoid gambling in the grey market. Current tax rates on live games and lotteries is sufficient.”

Jan Bartošek, a member of the Chamber of Deputies for the Christian and Democratic Union party…

…also said that he actually fears that an increase in tax rates could “lead to an increase in illegal gambling.”

Source:

“Czech Finance Ministry proposes gambling tax hikes”, igamingbusiness.com, April 8, 2019.