UK Treasury Reduces Online Gambling Tax?
The United Kingdom’s Treasury Department is on the verge of lowering the tax rate for online gambling operators. The idea behind the lower tax rate is to lure offshore gambling operators back to the United Kingdom.
UK Treasury Lowers Online Gambling Tax
Many online gambling operators left the UK because the UK government imposed a steep 15 percent tax rate on all Internet betting. The government said that it will gain more in the long run by reducing its current tax rate. The UK government lost a whopping GBP2.1 billion the last seven years. Hence the Treasury is thinking of slashing its current tax rate on online gambling operators by a third.
The reason for the new “point of consumption” taxation is to compel operators to apply for a license from the UK Gambling Commission instead of applying for an offshore one.
The Mail on Sunday pointed out that certain EU countries pay up to 20 percent tax while online gambling is against the law in countries such as the United States and Germany. The newspaper also reported that a senior government source said that the Treasury is on the verge of lowering its current tax rate on online gambling by a third. In the event a five percent cut does happen, companies could save as much as GBP 100 million per year on tax.
The source continued in the same vein and said that if the tax rate is lowered from fifteen percent to ten percent two separate arguments will ensue. The first is what is an appropriate tax rate and the second will people pay it?
Those who favour online gambling feel that a reduced tax rate is a step in the right direction. Not only will it bring back online gambling under the control of the UK Gambling Commission but it will enable it to combat under age and problem gambling and to monitor and clamp down on match-fixing.[addtoany]
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