Disappointing Tax News From London

Published: Wednesday, March 21, 2007 Online-Casinos.com

DISAPPOINTING NEWS FROM LONDON

Remote Gaming Tax rate announced by Chancellor Brown is discouraging

Today's (Wednesday) budget speech by Britain's Chancellor of the Exchequer, Gordon Brown has been initially met with disappointment by many online gambling companies expecting a better tax incentive for moving to Britain and seeking regulation under the new Gambling Act.

Speculation on what the British government would offer as an incentive for remote gambling companies to move to Britain ranged down as low as 2 percent, and the Chancellor's announcement of a 15 percent rate of taxation is discouraging.

The Remote Gaming Association (RGA) was the first to express disappointment at the 15 percent rate for the new remote gaming tax, which has been set at the same rate as gross profits tax payable by UK-based bookmakers.

The chairman of trade association Remote Gaming Association, John Coates said the 15 percent rate means the UK government has "effectively turned its back on the industry.

"Under this regime, with the additional VAT and corporation tax for most companies, it would be almost impossible for a UK-based operator to compete with offshore businesses, especially those located in other EU jurisdictions" Coates opined.

His chief executive took a more lenient view, however. Clive Hawkswood said there was some good news for the industry from the budget. Contrary to some fears that the chancellor had plans to levy VAT on participation charges, such a measure was not introduced.

"The VAT issue was the scary one, but it has been put to bed for now" said Hawkswood.