Irish Gambling Tax Hike a Major Issue
It’s a move that will inevitably end up crippling many businesses, but Ireland seems set on increasing gambling taxes, and the expectation is that next week’s budget speech will include an announcement that duties on gambling-related operations be increased from 1% of turnover to 2% of total turnover.
The government is reportedly hoping to raise an additional €50 million for public spending, of which a large portion is expected to be used in the fight against problem gambling. The rise in taxes is seen as the direct result of negotiations between the Independent Alliance and Minister of Finance, Paschal Donohoe.
Job Losses A Major Concern
The Irish Bookmaker’s Association has issued a stern warning against the decision of a hike in gambling taxes. The Association has slammed the decision and has said that it will be a decision that will ultimately be responsible for the closing down of the lion’s share of the country’s more than 850 betting retail outlets. The truly concerning part is the fact that more than 1,500 jobs may be jeopardised. This will have far-reaching negative consequences for Ireland’s economy.
According to the Association’s budget projections for July, 1% is the maximum percentage that will be absorbed by especially smaller operations. Anything more will cause these businesses to close doors.
Economy-Wide Consequences
Sharon Byrne, chairperson of the IBA, has said that when considering that the average-sized independent betting shop is already paying more than 6 times their profit in taxes, doubling that figure will cause that particular business to no longer be able to keep its doors open. These types of businesses may be small, and their annual turnover considered to be modest, but they offer much in the way of employment to the Irish economy.
Byrne reiterated the fact that the industry was notorious for its low profit margins, and that any change in the current taxable percentage will end up catapulting the entire balance out of whack. Many businesses will simply not be able to continue to trade. The IBA estimates that there have already been more than 500 business closures over the last 10 years, with more than 2,500 jobs having been terminated in the process. The economy will not be able to absorb many more job-losses, and an increase in taxes will have a ripple effect for all, and not just for the gambling industry.