It was announced that the Finance Minister of the Czech Republic Andre Babis is going to present a proposal for a hike in gambling taxes on Friday, December 19. Annually, the government receives a total of CZK8 billion or US$359 million from taxes. If Mr. Babis’ proposal is approved, the amount will reach up to CZK14 billion or US$629 million.
Currently, Czech gambling operators are expected to pay a 20% tax on their gaming revenues and a 19% corporate tax. According to a local newspaper, Babis will most probably propose for the tax on gaming turnover to be increased to 30-40%. In addition to this, different rates will be applied to different games. For instance, lottery games in the country are expected to be subject to a 30% levy. Live slots, on the other hand, will probably be imposed a 40% one.
There is no information about the taxes that providers of online and live poker games will have to pay, provided that Mr. Babis’ proposal is approved.
According to the Finance Minister, the new taxes will certainly help the economy.
This sharp increase in levies is to be included in the new Czech Lottery law, which is expected to become effective in 2016 and to significantly improve the local gambling-related industry.
The Czech government is planning to adopt a system, resembling the one that is to be launched in Ireland in the first months of 2015. In this way, foreign operators will be allowed access to the online gambling market of the Czech Republic.
Back in October, 2014, Mr. Babis said at a special conference that the local gambling industry is “out of control”, due to which the country loses huge amounts of money every year. He also stated that the current laws do not comply with the standards that were set by the developed European countries and that certain reforms should be implemented.
The Finance Minister believes that the amendments in the current law should ensure that the country’s citizens will be protected from gambling addiction, the number of casinos will be decreased, the state’s ability to supervise the industry will be improved, and proper taxes will be imposed on all types of gambling activities.
Ondřej Závodský, Deputy Finance Minister of the Czech Republic, also supports the reform in the current law. He cited a study, conducted by the Czech Supreme Audit Office, according to which, annually, about CZK600 million are deposited to gray-area and offshore gambling providers.
If the new Czech Lottery law gets its approval, live gambling will also be affected. For instance, no gaming rooms will be opened in cities with less than 5,000 residents. As for casinos, they will be available only in cities with more than 40,000 residents.
