Portugal Steps Back From Gambling Tax Reduction

Portugal Steps Back From Gambling Tax Reduction ( Click to Enlarge )

Portugal changes mind with regard to online gambling flat tax, just over a week after the idea was first proposed.

Swift Policy Change

An old adage states that a week is a long time in politics, but the very same could be said of online gambling.

Just over a week ago, the Portuguese government proposed a 25% flat online gambling tax – as we reported on this site – but now it would appear that the plan has been scrapped, at least for the time being.

The initial idea was that a 25% flat tax for all online gambling revenues would replace the current system, which has an incremental 15-30% tax placed on online casino revenues, and a 8-16% tax on all other sports betting incomes.

However, now it’s all changed.

Dropped From Budget

This week, Jornal de Nogocios, a respected business newspaper based in Lisbon, declared that the recently proposed Special Tax on Online Gambling (IEJO) had not been included in this year’s final budget.

It is thought that Finance Minister Mário Centeno was considering whether it would be included until the very last minute, given that he delivered in the official budget document only 12 minutes prior to the deadline.

MPs in Portugal will start their debate around the state budget at the end of October, with the final vote set to be announced on November 30.

Though this is the case, it remains unclear whether there will be any chance for the tax proposal to be reintroduced.

However, given the Portuguese government’s propensity for change and alteration, it wouldn’t be wise to rule anything out.

Bigger Picture

One criticism that has been levelled at Portuguese decision makers in recent months is that there appears to be a focus on short-term thinking, rather than contemplating what will be best for future generations.

This is largely attributed to the fact that there will be a general election in 2019 which is expected to be tightly contested.

Much of the budget is concerned with financial incentives for civil servants, and this has sent shockwaves through online gambling operators throughout the country.

The current gambling tax system means that licensed operators based in Portugal are forced to place the tax burden on their customers.

Of course, any increase in prices for consumers will likely encourage punters to spend their money with international operators, which is going to do nothing but further damage Portugal’s online gambling structure.