Tuesday, 25 June 2013

Questions (203, 219, 220, 221, 222)

Pearse Doherty

Question:

203. Deputy Pearse Doherty asked the Minister for Finance the tax income expected to be generated from the proposed legislative changes to the betting industry. [30359/13]

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Pearse Doherty

Question:

219. Deputy Pearse Doherty asked the Minister for Finance the amount of revenue that will be raised in 2014 by the taxing of remote bookmakers and remote betting intermediary at the 1% turnover rate and a 15% on commission charges as per the Betting (Amendment) Bill 2012 respectively. [30615/13]

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Pearse Doherty

Question:

220. Deputy Pearse Doherty asked the Minister for Finance the amount of revenue that would be raised in 2014 if remote betting intermediaries were taxed on the same basis as bookmakers that is a 1% turnover tax. [30616/13]

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Pearse Doherty

Question:

221. Deputy Pearse Doherty asked the Minister for Finance the amount of revenue that would be raised in 2014 in each case if remote bookmakers were taxed at a rate of 1%,2%,3%,4% and 5% of turnover. [30617/13]

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Pearse Doherty

Question:

222. Deputy Pearse Doherty asked the Minister for Finance the amount of revenue that would be raised in 2014 in each case if remote betting intermediaries were taxed at a rate of 1%,2%,3%,4% and 5% of turnover. [30618/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 203 and 219 to 222, inclusive, together.

The Finance Act 2011 provides for the taxation of bets that remote bookmakers enter into with persons in the State. This means, for example, that a business which engages in online bookmaking and which accepts bets from people in this country will be liable for betting duty on those bets, irrespective of where that business is based. The existing betting duty (1%) will be applied to such bets. The Finance Act also provides for the taxation of Betting Exchanges under the new arrangements; however the calculation of the tax will take account of their particular business model, in other words a 15% tax on the commission charged. In addition, excise duties are being applied to the granting and renewal of remote bookmakers’ and remote betting intermediaries’ licences.

The Betting (Amendment) Bill, which will establish the regulatory framework for the licensing regime, was published in July last year. Since that date work has been continuing by officials of my Department and Revenue on the drawing up of a number of amendments to the Bill to strengthen enforcement measures. It is my intention, given the number of amendments, to go back to Government in the very near future for approval to republish the Bill.

This Bill will allow for the extension of the betting duty to remote operators and will ensure that all bookmakers activities offered in the State are taxed equally. The fact that off-shore bookmakers were not subject to the betting duty represented a competitive disadvantage to on-shore firms and also narrowed the State’s yield from the duty.

It is difficult to predict with any real accuracy the yield from the taxation of remote bookmakers and betting intermediaries as it is difficult to predict how many remote operators will apply for licensing and regulation. However the estimated yield from the remote sector at the current 1% rate of turnover tax (and the 15% gross profit tax for remote betting intermediaries) is in the region of €20 million in a full year. The 2012 yield on traditional bookmakers was €27 million. Given that the calculation of the tax for remote betting intermediaries is based on a tax on the commission charged rather than a turnover tax it is difficult to estimate the overall impact on yield of an increase in the turnover tax for remote bookmakers at the rates outlined by the Deputy.

It is my intention to, in the first instance, broaden the tax base by including the remote operators. Therefore I have no plans, for now, to change the way in which remote betting intermediaries are to be taxed or to consider an increase in the betting duty on bookmakers.