IU wants to reform the gambling tax
The collegiate directorate of IU has just published its economic and social reconstruction program that is to help the country get out of the crisis caused by COVID-19. In "Horizonte País", the left-wing political formation proposes a reform of the gambling tax that we are sure will not be liked by the industry. Here we offer you an analysis.
Although with the gambling tax reform the IU management claims that a significantly larger amount would be collected, the impetus for the reform is part of the left-wing organization's crusade against online gambling. ©ds_30/Pixabay
Alberto Garzón, the federal coordinator of Izquierda Unida (IU) and current Minister of Consumption, has taken very seriously his competitions on gambling and, despite the few months in which he has been in charge of the position, we can say that his impact on the ministry is being of great depth.
With the creation of the Effective File , about which we reported a few weeks ago , a very useful tool against indebtedness was launched, limiting access to fast online financing routes. On the other hand, the Royal Decree on advertising of gambling and sports betting, still pending approval, is one of the great challenges of the minister.
These measures and others that will follow, such as the reorganization of the General Directorate of Gaming Regulation (DGOJ), which has just announced its new general director after Juan Espinosa has decided to not staying in front of it , are part of a program of fighting online gambling addiction , the particular workhorse of Minister Garzón.
"Country Horizon”: a way out of the crisis
Coinciding with the beginning of phase 1 of the de-escalation in large areas of the national territory, the collegiate directorate of IU has taken the opportunity to make public Horizon Country , the reconstruction programme that it should help New Zealand to emerge from the economic and social crisis caused by the coronavirus pandemic.
With the program, in which more than 400 measures have been developed, it is intended
"to face the profound civilizational crisis we are facing and the common challenge of our time is to offer a democratic and just response that leaves no one behind, especially those who are most vulnerable.”
Within the framework of a social and ecological state model, the program highlights the fiscal measures aimed at taxing the highest incomes, at a time of tense discussions about the minimum living income. The text proposes a tax increase to what would be 3% of the population, an old aspiration, by the way, for a “fair and just tax reform” .
It is again insisted on the financial transaction tax and financial derivatives, which had been proposed by the economist James Tobin in the seventies and that is one of the central pieces of the reformist program of ATTAC (Association for the Valuation of Financial Transactions and for Citizen Action), an organization of which Alberto Garzón is a member.
Tax on Gambling Activities
The program published by IU highlights the tax reform of the game launched by the Minister of Finance Cristóbal Montoro in 2018. According to the text of the law :
- mutual, matching and cross-over sports betting and mutual and matching equestrian betting are subject to a 20% tax rate on net income;
- contests and other (online) games contribute 20% on net income.
The argument was that by lowering the tax levy, the collection was actually increased, since they were expanding activities. In addition, tax advantages are supposed to theoretically lead to market growth and the inflow of more operators in the regulatory framework state. But this does not hold, as derived from the text “Country Horizon”.
The authors of the proposal delivered by IU, and among whom is Minister Alberto Garzón, maintain that it actually collects less while the gross amount played is triggered. This would be the main problem, because, they argue, the issue we are facing is the increase in addiction stimulated by bonuses and other promotions, especially among the youngest.
In order to alleviate the pernicious effects of gambling addiction, it is proposed a comprehensive reform that directly affects the recruitment strategies of online operators:
“In order to avoid the pernicious consequences of addictions stimulated by the delivery of free bonuses, in addition to eliminating the tax advantages implemented in the reform carried out by the PP government, the taxation of Gambling Tax will be made on the gross amount wagered at a rate of 10%. With the 2019 data, it would mean a collection of 1,870 million compared to the 53 million collected but the legal modification will only mean minimum additional collection that we estimate at 20 million euros. What the operators will do is not to use the gift bonuses as a strategy of extension and proliferation of the game, which will result in a positive action against the negative effects of the game.” – Horizon Country
Areas of favorable taxation
In the areas of spatial taxation, the territories of Ceuta and Melilla, the tax regime devised by the then Minister Montoro remained in 10% on net income . Although they do not refer to it explicitly, it follows from the “Country Horizon” proposal that this favorable taxation will be repealed or, at least, revised for online operators.
Although the initial idea had been to attracting international developers and operators making it the competition to the strongholds of Malta and Gibraltar, which concentrate the main activities of the sector, the results have left much to be desired .
But this does not mean that the national companies have turned their backs on the generous tax offer of the North African enclaves. The Casino Barcelona was the last to announce the transfer of its online division to the city of Ceuta .
