THE GOVERNMENT is set to row back on plans to double betting tax pending the outcome of efforts to impose a similar charge on online and phone gambling.
In his budget last October, Minister for Finance Brian Lenihan announced the Government intended to double the turnover tax levied on bookies to 2 per cent from 1 per cent from May 1st.
The Government now intends to amend the Finance Bill to postpone the introduction of the 2 per cent charge.
It has decided to carry out a study into taxing online and phone betting, which are not subject to any levy.
A spokesman for the Department of Finance confirmed last night that the Government had introduced the amendment.
It is reserving the right to introduce the 2 per cent tax by ministerial order pending the outcome of the study.
The spokesman made it clear that the Government wanted the betting industry to take part in the study. “The betting industry will be expected to engage in a constructive fashion in discussions about, inter alia, online and phone betting, and how to get this area to contribute while protecting Irish jobs,” he said.
Bookmakers have warned that the extra charge will lead to closures and job losses, but have also argued against taxing online and phone businesses, on the grounds that it will give an edge to offshore rivals in these markets.
The taxing of betting revenues is used to contribute to funding horse and greyhound racing.
The current system was established in 2001, when the tax was 2 per cent. The exchequer collects the tax from bookmakers and pays it over to both industries through the State-managed Horse and Greyhound Racing Fund.
In 2001, the State committed to increasing the fund in line with inflation or the take from the bookies, whichever was greater.
However, online betting took off at the same time, and gambling revenues effectively began to move offshore. During his time as minister for finance, Taoiseach Brian Cowen cut the betting tax from 2 per cent to 1 per cent. This left the Government making up the shortfall.
In a recent interview, Denis Brosnan, the former Kerry Group boss who chairs the State body Horse Racing Ireland, said the racing and breeding industries had “never been happy” with that situation.
The commitment to match either the betting tax or inflation ended in 2008. Horse and greyhound racing have had their allocations cut this year, and there are no agreements in place for funding from 2010 onwards.
