The UK’s proposal to impose a 15 percent point-of-consumption (POC) tax on online betting companies serving customers in the United Kingdom has been met with a lot of protests from various corners of the industry. Now, you can add online gambling officials in Gibraltar, one of the off-shore sites where a number of British online betting firms are based, to that list.
The uproar surrounding the proposal doesn’t come as a surprise to anybody, especially in light of the dramatic increase in taxes these companies have to pay after enjoying tax payments of just one percent up to a maximum of GBP425,000 under the current system.
Gibraltar’s gambling commissioner, Phil Brear, voiced his opinion on the proposed tax hike and he wasted little time critizing the UK’s proposal, calling the new gambling tax as “clearly against the common sense logic of electronic commerce”.
Brear isn’t alone in slamming the proposal. Bookmakers have also been up-in-arms over the new proposal, some even fearing that the new tax would put a serious dent on how these companies are doing business these days. These companies have long anticipated a tax hike to happen sooner than later and while a lot of them have come to terms with this emending hike, the main point of contention is the 15 percent, something online companies are looking to reduce to somewhere in the neighborhood of 10 percent.
That 15 percent number is a huge amount that would put unwanted – and added costs – on the business and a study conducted by KPMG last month corroborated those assertions. The global auditing firm concluded in its report that a 15 percent tax will “fail to achieve” its goal of protecting consumers and could lead businesses to operate “in the grey market” while also forcing UK customers to take their betting somewhere else, thus putting a huge dent on betting companies to successfully operate their business the way they were accustomed to in the past.
