The Czech Republic to Increase Gambling Taxes to 30% in 2020

Ministry of Finance in the Czech Republic has confirmed plans to impose higher taxes on certain gambling activities in the country. The changes are expected to take place from January 2020. The current tax rate for gambling is set at 23% of gross gaming revenue (GGR). The only exception is gaming machines…

… which are taxed at 35% of GGR. However, according to the draft gambling tax act published in 2015, the taxes in the new structure should be split into three levels. This will be determined based on how harmful the government perceives the activity to be.

To Initiatives

The announced changes, unveiled in April this year, which will take place from January 1st, 2020, come as the result of a long-running campaign by the Czech Ministry of Health and the National Drug Policy Coordinator. They are calling to address the increase in the availability of addictive substances and services. As for the exact amounts…

…lotteries, live games, and bingo operators will be taxed at 30%, up from the current rate of 23%. The percentage for fixed odds betting will also grow from 23% to 25%. The Ministry of Finance pointed out that some of the additional funds from higher taxes will be used to problem gambling initiatives in the country.

Alcohol and Tobacco Taxes to Be Higher as Well

Among the suggested changes, the Ministry of Finance also proposed higher taxes on both alcohol and tobacco. Speaking in exact percentages, the excise duty on 0.5 liters of spirits will see a 40% increase. Moreover, a rise in excise duty on cigarettes will grow from 27% to 30%. Finance Minister, Alena Schillerová, commented on the alterations as follows:

“Our country has made considerable progress in the field of combating addiction in recent years… but expert figures show that we must remain active. The increase in excise duties lowers the availability of addictive substances and also enables them to raise funds to prevention projects.”

Counter-productive or Not?

The opinions on these measures are slightly divided. Czech Health Minister, Adam Vojtěch, sees it as a good way to decrease gambling health issues, pointing out that:

“Higher taxes can not only increase revenue but also motivate consumers to reduce consumption, thereby reducing related health problems.”

However, Jan Volny, the vice-chairman of the ANO 2011 political party, disagreed with the suggested alterations. The way he sees the situation, the increase to 30% could be counter-productive in collecting taxes. Moreover, Jan Bartošek, a member of the Chamber of Deputies for the Christian and Democratic Union party, added that higher tax rates could “lead to an increase in illegal gambling.”

Source:

“Czech Republic to introduce higher gambling taxes in 2020”, igamingbusiness.com, May 29, 2019.