RGA CALLS FOR RE-THINK ON UK TAX


UK government announced plans to tax online gambling


The UK’s Remote Gambling Association (RGA) has called for Britain’s online gambling tax proposals to be changed following a report by financial services firm KPMG.

In its 2012 Budget, the UK government announced plans to tax online gambling on a “place of consumption” basis, and in August, confirmed that it intends to impose a 15 percent tax rate on online betting companies that target customers in the country but are based in offshore tax havens.

However, according to the RGA, which commissioned the study, the KPMG report found that the proposed tax is “likely to fail to achieve its aims” unless the rate of gross profits tax does not exceed ten percent and allowances are made for companies to offset costs associated with bonuses and incentives.

The report said that the immediate implementation of the proposal could lead to firms being unable to recover their costs and a large number of UK customers switching to gambling products from duty- avoiding providers because they are able to offer lower prices.
“If either of these come to pass, then it may be difficult to reverse these consequences with a subsequent reduction in the tax rate,” the report said.
 
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