IRISH TAX INCREASES

21 November 2008

Online and telephone betting to remain untaxed

 

The Independent reports that a 1 percent increase in tax on Irish land bookie shop revenues will not be extended to online and telephone betting. While the duty has been raised to 2 percent for betting shops, online services will continue to be tax free.

The information emerged during a briefing on the Finance Bill yesterday by Finance Minister Brian Lenihan, who said he had delayed making major changes on betting duty as he needed more time to examine the [online] industry. Previous attempts to tax the online betting industry have met with failure as big bookmakers moved their operations to offshore tax havens such as Gibraltar, reports The Independent.

Lenihan said at present betting shops were taxed but internet transactions, which accounted for the bulk of the industry, were not.

The problem for the Department of Finance is that betting online or over the phone is routed through other jurisdictions and Lenihan is not in a position to levy tax on their takings, a spokesman explained. The attraction in taxing online business lies in its continued rapid growth, and the fact that for most bookies online revenues now account for the most profitable part of the business.

Lenihan's general tax proposals have not made him the most popular man in Ireland this week; already hard-pressed low and middle-income earners bear the brunt of his Euro 2 billion in tax hikes announced yesterday. The new super tax is applied on all wages, irrespective of whether a worker is low paid. There is no cut-off point. It was estimated last night that ordinary PAYE taxpayers on Euro 50 000-a-year will face a cut of as much as Euro 1 000 in their disposable incomes.

The same taxpayers also face cuts in the tax relief on mortgages for non first-time buyers; hikes in VAT rates; an 8c duty on petrol and higher motor tax; increased excise duty on cigarettes and wine; a cut in what be can be reclaimed on medical costs; a new travel tax and hikes in hospital charges. PAYE earners also face a Euro 200 car space tax.

The Cabinet has taken a 10 percent salary cut in solidarity with the taxpayers, but media characterised this as a publicity stunt this week, revealing that ministers' pensions will still be based on the higher salary they earned before the pay cut. This was confirmed by a Ministry of Finance spokesman.