Inadequate taxation of gambling deprived the budget of billions of hryvnias: Victoria Zakrevska
During the first seven months of this year, legal gambling organizers in Ukraine replenished the state budget by 9.8 billion hryvnias in tax payments. This indicator, especially in the conditions of war, looks impressive. Over the past year, the gaming industry provided the state budget with 10.4 billion hryvnias, so it is already possible to predict that 2024 will become a record year in terms of the amount of gambling taxes.
However, experts note that such results have become a reason for supporters of the legalization of gambling to boast of achievements in the fight against illegal business. At the same time, they directed the public’s attention from the real problems of gambling market reform to the celebration of financial “records”.
As considers Victoria Zakrevska, deputy head of the Ukrainian Gambling Council for communication issues, the development of legal gambling is the result of hard work of those who believe that Ukraine can and should become a regional leader in the entertainment industry. She emphasizes that despite all the difficulties, these enthusiasts seek to occupy a significant part of the European market. The difficulties faced by the industry are mostly legislative in nature and manifest in increased administrative pressure on the legal gambling market. At the same time, there is also a semi-legal market that has been operating for the second decade in a row, based on the special legal status of lotteries, which are not recognized as gambling in Ukraine.
Due to the fact that lotteries are not gambling, their taxation is as light as possible, and funds from their activities practically do not enter the state budget. Legislators, unfortunately, do not pay due attention to this issue. Current legislation allows lottery operators to actually imitate all types of gambling and make money from it, leaving the interests of the state without proper protection. However, even a temporary investigative committee of the parliament, which could have investigated this lack of funds, was never created.
“Despite the fact that the current legislation enables lottery operators to imitate practically all types of gambling and make good money from it, leaving the interests of the state out of consideration, the parliament did not manage to create even a temporary investigative commission to check the lack of funds!
People’s deputies are not in a hurry to streamline the fiscal legislation. Adoption of draft law No. 2713-d, which has been waiting for consideration in the second reading for several years, would allow solving several tasks at the same time:
– to eliminate problems and inconsistencies in the taxation of gambling by removing temporary regulations, unifying terminology and bringing Ukrainian fiscal rules closer to global ones;
– to reassure Western investors and guarantee the stability of the rules of the game in the taxation system;
– significantly increase revenues from the legal gambling market to budgets at all levels.” – emphasizes Victoria Zakrevska.
The expert believes that due to an insufficiently developed tax policy, Ukraine has suffered significant budget losses since the restoration of the legal gambling industry. Gambling as an industry has the potential to generate even more revenue, but if the tax rates are too high or the taxation system is too complex, it can lead to tax evasion or even the closure of legal operators.
“The need to find a balance between stimulating the development of the industry and ensuring adequate revenues to the budget. A reasonable tax policy can help Ukraine not only increase budget revenues, but also create a healthy environment for the development of gambling in the country.
Inadequate taxation of the gambling business has already deprived the budget of billions of hryvnias, and it is time to correct this situation, starting, for example, with the return of lotteries to the category of gambling and the introduction of an appropriate taxation scheme for them.” – summarizes Zakrevska.
