Czech Government Softens Tax StancePublished September 15, 2015 by Lee R
The gambling coalition will divert the planned tax hike to slots.
In an interesting regulatory accommodation by government, the Czech Republic seems to be putting its best foot forward to attract operators to their newly regulated market.
According to reports, Czech Republic politicians have come to an agreement to lower the gambling tax hike on operators in their regulated market from 25% to 23%.
The current industry tax is 20%, and the originally planned 5% increase raised fears among private operators and potential market entrants that the hike would eat too far into their profits.
Savings for Operators
Czech business newspaper Hospodarske Noviny estimates that the lowered hike stands to save private operators such as Fortuna Entertainment Group over 30 million Czech crowns for the upcoming year.
This reduction is going to be felt elsewhere. The fact is slot machine operators in the will be subjected to a higher tax rate, at 28% instead of 25%. An additional daily 110 Czech crown tax per machine will also go into effect.
Czech Social Democrat Party Leader Roman Sklenak clarified that the coalition council on which he sits decided to file the amendment.
Other members of the coalition include leaders of the Social Democrats, populist ANO movement and Christian Democrats.
The planned measure modifies an increase that was initiated at the behest of Czech Republic Finance Minister Andrej Babis in December 2014. The original suggestion seemed rather ambitious, as it sought to double the amount of taxes that the government would take from the gambling industry in 2016.
In addition to the tax hike, betting firms in the Czech Republic are paying a 19% corporate tax rate.
With the country's new anti-drug policy now treating gambling as a drug, the regulation modification was likely necessary to protect against being perceived as an unfavorable market for entry by private operators.
The Czech tax restructure is an excellent example of the means by which characteristics of a country's regulation can affect the legislation in pursuit of a happy medium between government and operators in this new era of regulation.