The Czech Republic’s Ministry of Finance has announced plans to increase gambling taxes in the country, with bingo, live games, and lotteries set to be the hardest hit.
Aside from gaming machines, which are taxed at 35% of gross gaming revenue (GGR), all gambling taxes in the country are currently at 23% of GGR.
However, such rates would jump to 30% of GGR for lotteries, live games, and bingo operators, if the Ministry’s plans are approved. Other forms of gambling, such as fixed-odds betting, face a more modest increase from 23% to 25% of GGR, while the 35% rate for gaming machines would remain unchanged.
The proposals, which would come into force in January 2020 if rubber-stamped later this year, also include tax hikes for the tobacco and alcohol sectors, with the Ministry insisting that the sole aim is to “increase the public budget”.
The Ministry’s submission for the tax changes stated: “The proposed amendment to the gambling tax law divides the rate of gambling tax into three levels, according to the harmfulness of individual gambling in the same way as the government’s draft Gambling Tax Act of 2015.”
However, the plans have drawn criticism from a number of politicians in the country’s Chamber of Deputies lower house, including Miroslav Kalousek, the former leader of the KDU-CSL and TOP 09 parties who has twice served as the government’s Finance Minister.
“We can divide the word ‘gambling’ into socially acceptable activities and addiction,” he told the Pravo news website. “There is a big difference between slot machines and a bunch of employees in a workplace contributing towards a ticket.
“For lotteries, I would leave the rate of taxation at the current level. I consider the increase to 30% to be absolutely disproportionate and unnecessary.”
Jan Volny, the vice-chairman of the ANO 2011 political party, which has 78 seats in the house, said that he would “agree with a slight adjustment, but 30% is a lot and could be counter-productive in collecting taxes”.
He added: “Personally, I am a little worried not to overdo it and avoid gambling in the grey market. Current tax rates on live games and lotteries is sufficient.”
Jan Bartošek, a prominent member of the Chamber of Deputies for the Christian and Democratic Union party, echoed fears that an increase in tax rates could “lead to an increase in illegal gambling”.