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Czech Republic Set to Raise Gambling Tax
- April 14, 2016 By Nemanja L. -
Czech Republic has made an important step towards increasing the gambling tax in the country as the lower house approved the bill designed to increase said tax.
The European Union state is in the process of regulating its gambling market and the government has clearly jumped at the opportunity to hand a much needed boost to the country’s economy.
The Lower House of the Parliament, also known as Chamber of Deputies, has given the all clear to the latest legal framework that is supposed to raise the gambling tax from 2017.
Under the terms of the agreement, the tax on slot machines will raise from 28% to 35%, whereas sports betting and lotteries revenue will be taxed at 23%.
It is important to note that said tax will be applied separately to the standard corporate tax of 19 percent, which the country’s gaming operators are already paying.
The bill is now set to go to the Upper House for endorsement, before Czech Republic president Milos Zeman signs it into law.
The legal framework had been introduced in 2015 and was supposed to be effective from January 2016, but there have since been several delays. Nevertheless, once it become effective, the bill is expected to bring around 2 billion crowns (€74 million) to the government.
Czech Republic residents are believed to have placed around 138 billion crowns (€5.1 billion) in gambling wagers in 2014 alone, with over 50 percent of that amount placed on slot machines.
Czech Republic Plans to Regulate Online Gaming Market
Following UK’s example, the government last year attempted to introduce a point of consumption tax on foreign gambling operators who offer their services to Czech players, as the Ministry of Finance wanted such operators to surrender around 20 percent of the revenue earned from Czech gamers.
The Czech government is currently considering issuing first online licences, and the Finance Ministry was recently instructed to locate and close all illegal gambling websites operating in the country.
For the time being, only several domestic companies have been authorised to organise different forms of gambling, but the new gaming law, expected to regulate online gambling, slot machines and lotteries, could come into effect early next year.