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The increase of betting tax from 1% to 2% in Ireland could turn out to be a spoiler for both gambling companies and government alike. It is quite obvious that tax rise would eat into the gambling companies’ profits. However, strangely, a new estimate reveals that the Exchequer of Ireland could also end up losing €35 million because of the hike.
This is because a number of smaller shops, especially those in small towns and villages, could be shut down because of the tax hike.
Anthony Foley, the emeritus associate professor of economics at DCU, explained that the implementation of the new betting tax doesn’t consider the possible negative effects on the existing tax take from the sector in such as income tax, USC and PRSI and increased expenditure from unemployment due to job losses.
He also considers that the increase happened without a detailed analysis of the possible negative economic effects on the commercial viability and sustainability of bookmakers, “unlike the Department of Finance’s analysis of the hospitality VAT increase.”
“Arising from Exchequer revenue reduction, due to loss of other taxes, job losses and possible closures, the Exchequer losses could be in excess of the gain from the 100% increase in betting tax for the retail sector, if shop closure rates are at the rate predicted by the industry,” he concluded.
Source: Latest News on European Gaming Media Network
