A report came over the weekend that the British government's Treasury department is "....set to hand the gambling industry a multi-million-pound tax cut as part of an incentive to bring the offshore internet gaming business back to Britain."
This may come as a real boost for online gambling in the country which seven years ago drove many businesses offshore by introducing a 15 percent tax for all internet betting.
Now it appears that the authorities have come to a conclusion that it’s much better to bring the companies back to the country, so the Treasury is considering cutting the tax by a third in an effort to lure them in and get back some of the estimated GBP 2.1 billion in lost revenues over the last seven years.
This new "point of consumption" taxation and regulatory regime is designed to deny access to the British market unless operators have a UK Gambling Commission licence and pay tax.
It was also reported that, should the tax cuts happen, they’ll represent the result of an outcry in the UK over tax-smart corporations like Starbucks, Google and Amazon which have allegedly avoided UK tax through sharp financial, organisational and corporate planning.
However, the advocates of fair tax keep criticizing and opposing any new tax concession to the internet gaming industry on social and fiscal grounds.
It is noted in the Mail newspaper that "Opponents to the tax concession point out that other EU countries impose higher gambling taxes of 20 percent and, in the case of Germany and America, have laws that greatly restrict all online gambling.”
The newspaper also said that it learned from a senior government source that the Treasury is close to accepting the argument that the rate on internet gambling should be slashed by a third and that "On the Treasury’s own estimates, a five percent cut would save the companies nearly GBP 100 million in tax each year."
The source was also reported as saying that the argument for lowering gambling taxes from 15 percent to ten percent was almost won, adding that "There are two separate arguments – what is the appropriate rate of tax and should people pay it?
"On the second of those two questions, the answer must be a firm yes. I’m all in favour of lower taxes but we have got to work out how it is going to be paid for. There is an argument that you should lower taxation in order to incentivize the firms to come back."
Some of the reasons in favor of bringing the online gambling businesses back under the British regulatory control include better regulation against under aged gambling, problem gambling and other internet scandals, as well as better player protection and scrutiny on match-fixing.