UKRAINE

Ukraine: gambling industry needs better tax policy

Ukrainian News website has publishes an articles with critics towards the members of the parliament who delay the legalization of gambling business. Back in September 2019, the President Vladimir Zelensky made it clear to everyone that gambling should be legalized. However, five months since the first reading in the Parliament deputies cannot prepare the bill for a second reading.

According to the authors, the industry still does not understand new gambling tax policy. Moreover, if no changes are made to the current tax code before the gambling business is legalized, it is unlikely that gambling establishments will be interested in operating legally. In addintion to  GGR, gambling organizers must buy a rather expensive license and pay a standard income tax of 18%. In other words, with a high license price, GGR tax should be abolished.

The initiative to abolish the GGR tax has a second side. It cannot be counted without an effective online monitoring system. In Ukraine, according to draft law 2285-d, adopted on first reading, online monitoring will be introduced only 2.5 years after the adoption of the law on the legalization of gambling.

As for the online monitoring system, it is really a long-term task. According to the estimates, this is about 200-300 million transactions per day, which requires expensive hardware.

At the same time, while the system is not developed, it makes no sense to introduce a tax on gross gaming income, since it cannot be calculated, and it will only give rise to corruption and filling the pockets of some officials. Thus, GGR tax makes no sense.

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