Czech Ministry of Finance Defends its Decision to Increase Gambling Tax

The Ministry of Finance of the Czech Republic has defended its decision to introduce higher taxes on certain gambling activities, after a national newspaper claimed the tax hike would harm the country’s land-based market. The Ministry said that income from the higher taxes will help support its efforts to protect people from gambling-related harm.

From January 2020, a new structure will split taxes into three tiers, according to how harmful the government perceives the activity to be. Gambling tax is currently set at 23% of gross gaming revenue (GGR,) with the exception of gaming machines, which are taxed at 35% of GGR. Lotteries, live games and bingo operators will be taxed at 30% of GGR, up from the current rate of 23%, while the rate for fixed-odds betting will rise from 23% to 25%.

Jiří Dolejš, a member of the parliamentary budget committee for the Communist Party of Bohemia and Moravia (KSČM), said the government should reconsider the decision before implementing the new regulations.

Dolejš put forward an alternative proposal whereby the rates for lotteries, live games, bingo and fixed odds betting would remain the same, but the tax rate on gaming machines would be increased from 35% to 38%. He added that the government should be focused on tackling online gambling, claiming the channel was riskier than certain forms of land-based gambling.

“The main intention is to raise taxes for slot machine operators, which are the most harmful. The point is to reasonably maintain different rates of gambling taxation according to social risk, but the Ministry of Finance was not interested in this debate,” Dolejš said.