UK chancellor hints that gambling tax rise is on the cards
Rachel Reeves has given the first suggestion that she may be swayed by pressure to increase taxes on the sector.
UK.- The British chancellor Rachel Reeves is facing pressure to increase gambling tax both from within the Labour party and from opposition politicians. Over 100 Labour MPs signed a letter to Reeves calling for the rate on online gambling to be increased, and the Liberal Democrats are also pushing for a gambling tax rise.
With just under two months still to go until Reeves presents the government’s autumn budget on November 26, she’s now given the first hint that she may be swayed by these arguments. She didn’t mention gambling taxes during her speech at Labour’s Annual Conference, but she did address the topic in an interview for ITV yesterday (September 29).
“I do think there’s a case for gambling firms paying more,” the chancellor said. “On a personal level, I’ve never bet in my life. They make an important contribution to the economy, but they should pay their fair share of taxes. We’ll make sure that happens.”
While Reeves provided no detail and hasn’t suggest how big a rise could be on the cards, many Labour MPs and former prime minister Gorden Brown are specfically calling for online gambling tax to be raised from the current 21 per cent to as high as 40 per cent of gross gambling yield (GGY).
Many favour a higher rate for online casino as opposed to sports betting, including horse racing betting. However, in April, the government presented a proposal to replace the current three separate rates with a unified Remote Betting and Gaming Tax. If the government does announe an increase to the tax rate in November, it’s not clear whether that would be under the existing structure of the proposed simplified model.
“A single, undifferentiated tax regime risks removing important fiscal levers that currently incentivise lower risk product design and behaviour. It would also weaken the broader public health goal of reducing gambling-related harm; an objective to which this government has rightly committed,” Labour MPs wrote in their letter to Reeves.
Gambling industry response
The gambling sector has strongly criticised the proposals both to unify the tax rate on online gambling and to increase the tax rate. The Betting and Gaming Council has called proposals for the latter short sighted.
BGC CEO Grainne Hurst said: ”They have sold this policy as a quick fix, an easy solution, but the truth couldn’t be further from the truth. Each month 22.5m people enjoy a bet, in bookmakers on hard-pressed high streets, in casinos, which are a pillar of our leisure and tourism sector, plus in bingo halls and online.
”It’s these millions of people who will feel the hit if this government caves to the demands from those who look down their noses at people who enjoy a bet, and who have gleefully heaped more pressure on the Chancellor. Their number includes former colleagues and local Labour politicians who ignore the investment we make in their constituencies, and should know better.”
She also highlighted the results of this year’s gambling tax hike in the Netherlands, where the national regulator, the KSA, has said that the increased rate was counterproductive, leading to a drop in tax revenue.
