Online casino tax cut could cost Estonia 31 million euros

Estonia could lose about 31 million euros in tax revenue through 2029 because of a reduction in the tax rate for remote gambling, ERR reported, citing Urmas Reinsalu, chairman of the parliamentary State Budget Control Select Committee.

Margus Allikmaa, head of the Cultural Endowment, said the organisation would lose a combined four million euros this year and next year because of lower gambling tax revenue.

The committee held an extraordinary public session on Monday to examine gambling tax receipts following the change in the remote gambling tax rate and its impact on the state budget and areas funded by the tax.

Reinsalu said the Finance Ministry’s forecast showed that, compared with the previous estimate, the state’s lost revenue would amount to about 31 million euros from this year through 2029.

He said ministry officials had anticipated the impact when the law was adopted, but that the decision had been political. Reinsalu called for the tax cut to be reversed without delay, saying the government had not provided any direction to correct the decision despite the difficult fiscal situation.

Reinsalu added that reversing the change would require six months’ notice. Because the reversal would involve a tax increase, each month or week of delay would increase the ongoing shortfall in state budget and Cultural Endowment revenue, he said.

Allikmaa told ERR that the Cultural Endowment had been forced to reduce grants and review its investment plan for nationally important cultural buildings because of lower remote gambling tax revenue.

He said grants to cultural organisers, authors, performers and other recipients would be smaller than initially expected. The adjustments to the cultural construction financing plan were not yet large enough to delay or cancel projects, but the situation could become more serious if the tax reduction continued.

The current law provides for a further reduction of 0.5 percentage points next year, which Allikmaa said would mean an almost 14 percent fall in revenue. Some payment schedules for cultural construction projects, including those involving ERR, might have to be extended, he said.

Since the tax change was introduced, only one company has received a licence to operate in the Estonian market, while the licences of two other companies are still being processed.