The Ukrainian parliament’s Scientific and Expert Management Committee has warned that the government’s proposed tax regime for the country’s newly legalized gambling market is unjustified and could lead to a need for government subsidies to make up a funding shortfall.
The tax regime for gambling in Ukraine approved by the Committee on Finance, Tax and Customs Policy in February sets out a flat tax rate of 10 per cent for all gambling verticals.
Other competing bills had previously proposed a range of different rates ranging from 10 per cent to 30 per cent of gross revenue. However, the bill approved was a modified version of Bill 2713-d, which was put forward by committee chair Oleg Marusyak as Ukraine legalised gambling last August.
Under that bill, all gambling verticals could pay 10 per cent of gross revenue, as well as general corporate tax rate of 18 per cent. Customer winnings that surpass more than eight months’ minimum wage – currently UAH48,000 (€1,422) – will be taxed as income.
The amended tax proposal also cancelled a planned tripling of license fees for the duration of a transition period until the creation of a central monitoring system for gambling.
It said the government should set a tax rate that would ensure gambling made additional contributions to social projects and that operators would have to raise the cost of products, reducing the accessibility of gambling. The committee also argued that setting the tax on winnings at a high rate would minimize returns from legal gambling to the state.
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