New 2020 online gambling excise tax
Since online gambling was legalized in New Zealand in 2015, the activity has not stopped growing and generating more and more profit for all agents involved. In the report for the last quarter of 2019, the SRIJ recorded an increase in gross revenue of licensed operators in the order of 8,8 million dollars, as well as an increase in the amount collected by the special online gambling tax (IEJO), of 6,4 million dollars more than in the 3rd quarter of 2018.
The need to reformulate the IEJO
Although superficially the scenario seems Golden for all, there is much that licensed online gambling operators in our country, they demand a reformulation of the IEJO, claiming that it asphyxiates the industry, making it less competitive and attractive for foreign operators who, with profit margins so mitigated by the tax burden, are inhibited from investing in the country. In this sense, during the last year proposals were presented for reformulation of the tax, with the aim of lowering its value and achieving the application of a fixed value rate.
The proposals for the revision of the IEJO
Now, the state budget proposal currently under discussion in the Assembly of the Republic suggests amendments to the IEJO; some of them meet the expectations of operators, but do not satisfy all in the same way. According to the proposal, for example, an undifferentiated fee of 25% will be charged to all game (countertops and non-countertops, such as the poker ). The current tax varied between 15% and 30% (depending on the operator's profits) and charged only 15% on unbanked games. The uniformity of the rate will benefit the casinos with the most profits, for which the tax, in practice, will decrease, since if they obtain profits greater than 5 million they will be subject to a single tax of 25%, no longer applying the current progressive rate by steps, which could reach 30%. For casinos with lower revenues, this tax becomes even heavier, charging 25% on all gross revenues, regardless of their size.
This proposed revision to the IEJO benefits the large operators, so it is expected that large international casinos will soon apply for licensing in New Zealand. Let's wait!
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