[UPDATE: The government has since clarified that the tax hike will proceed as scheduled while the impact review is being conducted. The original article appears below.]
Ireland’s bookmakers have won a reprieve, if only temporarily, from the government’s plan to double their betting taxes.
Late Thursday, the Times reported that Irish Minister for Finance Paschal Donohoe had pumped the brakes on his plan to double the tax on bookmakers’ betting turnover to 2% starting January 1, 2019. Donohoe now plans to conduct a review of the tax impact on the betting sector that won’t be completed until next year.
Donohoe announced the tax hike in October when he unveiled the coming year’s budget, drawing immediate howls of protest from the Irish Bookmakers Association (IBA), which projected that the change would result in the closure of hundreds of Ireland’s remaining 855 betting shops and the loss of thousands of jobs.
Those cries were echoed on Thursday by Paul Tully, director of Tully Bookmakers, one of Ireland’s biggest independent operators. The Independent quoted Tully saying the turnover tax hike would “make us totally unviable,” and he’d likely have to close 18 shops starting in the new year, threatening the jobs of 70 employees.
Last week, the IBA convinced some Irish parliamentarians to propose an alternate tax scheme in which retail bookmakers would pay 10% tax on their wagering revenue while online bookies would pay 20%. The IBA claims this alternate plan would generate more tax revenue for the government than the 2% turnover tax, in part because there would be more betting operations still left open to tax.
The IBA got some parliamentary support from Michael McGrath, Fianna Fáil’s finance spokesman, who urged Donohoe to consider a different way. (A Sinn Féin MP even proposed a 3% punters tax.) McGrath said Ireland’s bookies “have opened their books to many of us and we have examined financial statements” that convinced him the turnover tax hike was the wrong way to go.
Donohoe will reportedly do his own homework and file a report with the legislature’s finance committee in the first quarter of 2019. But Donohoe didn’t hide his frustration that the betting industry was only now speaking with one voice, having failed to unite behind a single taxation proposal before he introduced his turnover tax plan.
It’s unclear whether the government will also consider an alternative plan for Irish-licensed online betting exchanges, whose tax on betting commissions was supposed to rise from 15% to 25% under the October budget plan.