Swedish government proposes higher GGR tax rate from 2024
New government proposals would see GGR tax rise from 18% to 22% from 1 July 2024 as trade body calls for U-turn
The Swedish government has proposed an increase in gross gambling revenue (GGR) tax rising from its current rate of 18% to 22%.
The proposals come as the Swedish government looks to retcon its initial 18% GGR tax rate it implemented when the Swedish market re-regulated in 2019.
At the time, the consensus behind the 18% tax rate was that it’s “precautionary” to allow the market to flourish and stave off leakage to the black market.
However, the government has elected to increase the tax rate, noting the market has “stabilised and channelisation has increased significantly” since 2019.
It was noted that a GGR tax rate of just over 20% could be considered compatible with the government’s aim of achieving a channelisation rate of at least 90%.
The government’s proposal read: “An increase from 18% to 22% is judged to be at a suitable level to strengthen the financing of government activities, without it leading to too great an impact on the companies and the size of the tax base.”
Once the government returns to parliament in the spring of 2024, it will put forward the proposal and if agreed the changes will come into effect on 1 July 2024.
Should the new 22% tax rate be approved, the Swedish government expects tax revenue to increase by SEK540m (£39.3m) each year.
Reacting to the new proposal, Swedish Trade Association for Online Gambling (BOS) secretary general Gustaf Hoffstedt expressed his displeasure.
He said: “The announcement from the government is deeply disappointing, above all because it shows that the government does not understand or has taken to heart what kind of market it is set to govern. Even less has the government understood the vulnerable position that market is in.”
BOS has previously raised concerns that the channelisation rate in Sweden was far below the government’s aim.
The Swedish government’s aim is for at least 90% of Swedish players to gamble with licensed operators. However, a study conducted by SKOP for the BOS found that the channelisation rate was around 77%.
Breaking that figure down by vertical, the study found that the sector with the best channelisation rate was lotteries and number games at 91%, with the worst sectors being online casino and poker at 72%.
On the disparity in channelisation rate, Hoffstedt commented: “We were recently able to show that channelisation in the Swedish gambling market is 77%. Some gambling verticals, including online casino, are as low as 72%. The trend is also declining, in other words the channelling decreases over time.
“We are already far from the state’s goal of at least 90% channelisation, and if this tax increase is approved by the Riksdag, we will soon be down to the channelisation we had before Sweden reregulated its gambling market in 2019.
“Sweden’s government must perform much better than this. There is still time to withdraw the proposal,” he concluded.