Ligi says online casino tax review can wait until next year

Estonia’s Finance Minister Jürgen Ligi said the government should not rush to reverse a tax cut for online casinos, ERR reported, arguing that the state must provide taxpayers with a predictable policy environment.

“I did not support this policy in principle, but the Riigikogu has decided it. I do not think it is appropriate to reconsider that decision several times a year. Whether the Riigikogu wants to change it is more a matter for next year,” Ligi said.

A law passed at the end of last year will reduce the gambling tax on online casinos from 6 percent to 4 percent over two years. In the first seven months of this year, gambling tax revenue totalled 3.3 million euros, 9.7 percent less than during the same period a year earlier.

Half of the tax revenue goes to the Cultural Endowment of Estonia. Its director, Margus Allikmaa, said that just under 1 million euros had not been collected by the endowment, while roughly another 1 million euros had not reached the state budget.

Allikmaa said the shortfall would not directly prevent events such as the Jazzkaar festival from taking place or halt construction of the public broadcaster’s television building. However, cultural organisers, authors and performers would receive slightly less support than expected. He said funding, which had generally increased from year to year, had instead stopped growing and become slightly smaller.

Tanel Tein, the Eesti 200 MP who initiated the tax change, said the shortfall was considerably smaller. He said the Finance Ministry had based its forecast on a 7 percent tax rate, while the current rate for remote gambling companies was 5.5 percent. According to Tein, the difference resulted from that 1.5 percentage point gap.

Tein also said that, based on operators’ declared turnover and tax liabilities, the Cultural Endowment’s shortfall from remote gambling tax was currently around 30,000 euros, although the full year had not yet ended.

The tax cut was intended to attract more online casinos to register in Estonia and increase tax revenue. Six previously processed gambling operating licences have been issued this year, and two companies have submitted licence applications.

Tein said the number of licences was not in itself a decisive indicator because one large operator could generate as much tax revenue as 10 to 15 smaller operators.