Ireland mulls betting tax rise as government readies 2021 budget

The Irish government’s Tax Strategy Group has called for a 0.25% increase in betting tax among several requests aimed at restoring funds diminished by Covid-19.

Members of the group claim the increase would raise an extra €8m (£7.3m) for the government in 2021, rising to €11m (£10.1m) in a full year of collecting the quarterly levied tax.

Operators are currently charged a tax rate of 2% on their respective turnover, a measure which was introduced last year and has been roundly opposed by Irish bookies, who insisted it would damage the industry.

In addition, the group called for a rise in the betting intermediary duty rate by 3.13% from 25% to 28.13%, to try and raise an additional €200,000 in 2021, rising to €300,000 over a full year.

The Tax Strategy Group said: “The department understands that the additional taxation burden of these two measures combined would be almost exclusively borne by large bookmaking firms.”

Tax relief for operators would also be increased from €50,000 to €65,000 per firm under proposals outlined by the body. The measure is primarily aimed at benefitting small independent retail bookmakers with expected 2021 turnover in excess of €2.5m (£2.2m).

The Tax Strategy Group’s report cited the “challenging position” faced by the Irish betting sector following Covid-19 and highlighted the dramatic fall in revenue during the pandemic and lockdown period.

It referenced a steep decline in betting industry receipts in the months following the relaxation of lockdown measures to €8.1m (£7.4m) in July 2020, compared to €26.9m (£24.7m) in 2019.

Elsewhere, Social Justice Ireland (SJI) has called for its own increase to Irish betting duty at a substantially increased rate of 3% of turnover, rather than the current 2%.

SJI claims the measure, which would apply to both retail and online operators, would boost the Irish government’s coffers by an estimated €46m (£42.2m) in 2021.

A&L Goodbody partner Joe Kelly said such an increase would hit retail and online operators already affected by the Covid-19 pandemic hard.

“In what are very economically challenging circumstances for all businesses, it seems unlikely that government would now seriously contemplate increasing the tax burden and risk tipping some businesses over the edge into liquidation with the consequent loss of jobs,” said Kelly.

“Instead, I suspect that government will be eyeing up the revenue generation opportunity that will derive from licensing all aspects of Ireland’s gaming and betting sector in the long-promised gambling law reform bill.

“Once that legislation is passed into law, then the government will have a much increased opportunity for recovering tax revenue from the gambling sector, while at the same time better policing that sector using the new system of licensing and the newly created regulator,” Kelly explained.

Ireland’s 2021 budget will be published on 13 November.