Portugal Takes Back Plans for Online Gambling Tax

Last updated on December 7th, 2018 at 08:00 pm

A while back, talks about Portugal imposing a new flat online gambling tax surfaced. More recently, there are reports of the plan in the 2019 fiscal budget. This is to add a 25% across the board tax on revenues from online gambling. This proposal is supposed to replace the 15-30% tax on revenues from online casinos. As well as the 8-16% tax on turnovers from sports betting.

But apparently, this proposal is not final yet. As the Special Tax on Online Gambling, locally called IEJO terms are not included in the final document. This is for the budget that was submitted by the finance department.

Portugal and the Gambling Industry

The state budget, where the proposal is included, will still be up for deliberation by the MPs of Portugal. The debate is scheduled for October 30, while the final vote will be on November 30. What remains unclear is if the gambling tax proposal will be reinstated or not. Rumor has it, that with the new elections coming up next year, the budget for next year allows for better provisions for the civil service. And while this works as a way to keep the power structure the same, the government is also looking for sources of the additional expenses. Taxing online gambling and sports betting seems to be an easy option for them.

What the creators of the proposal does not realize, is that the higher taxes will be detrimental to the local gambling operators. The higher tax burden will be passed on to the players or the bettors, which translates to higher fees. This makes it easier for people to switch to internationally-licensed gambling operators. Of course, the best sportsbook PPH experts in the industry will all tell you that long-term policies will greatly benefit all parties. But as long as the taxes will be this steep, local operators may not be able to deliver the expected revenues the government wants to collect from them.