DCMS again criticizes 15% tax rate. Unlikely the Treasury accedes this request given the UK’s fiscal position.
Rian (Ree) Saunders, Creative Commons Attribution 2.0 License

UK proposals for Point of Consumption (PoC) based gambling regulation have been broadly approved by the parliamentary committee responsible for reviewing them.

The Department of Culture Media and Sport (DCMS) Select Committee has given the go-ahead for the UK government to take the proposals to the next stage in the legislative process.

One area where the Committee has taken notice of industry concerns is in the level of taxation that the Treasury is likely to propose if the bill is enacted. The current 15% of Gross Gaming Revenue (GGR) is assessed as being potentially too high.

The Committee has asked the Treasury to review the figure to ensure that the rate doesn’t incentivize players to leave the regulated sector and play on so called grey-market sites.

“In setting a rate of tax, the Treasury should bear in mind the need to avoid setting it at so high a level that companies and their customers are driven into the black market,” the committee recommended.

DCMS has previously criticized the existing 15% tax rate in an extensive report, which concluded that “... it could lead to 40% of the industry leaving the market.”

It is difficult to see the Treasury acceding to this request given the UK’s fiscal position and the fact that the latest government financial estimates include assumptions that the rate will be set at 15%. To reduce the rate now would reduce the expected income and require offsetting budget cuts.