Finding €300 million for a poor finance ministerOct 24th, 2008 | By Ian Poulton | Category: Ireland
Information in this country can be very difficult to obtain.
In an contracting economy where the Government is so short of money that working people must pay a levy on top of their tax and social insurance payments to help balance the books, one might imagine that equity demanded that a contribution would come from all sectors. Surely in a country where there is now a 50 cent tax on each cheque a person writes and where an additional eight cent tax was imposed upon a litre of petrol, nothing could escape Brian Lenihan’s attention?
Could it be that Mr Lenihan forgot former finance minister Mr McCreevy’s love for horse racing? Maybe it was a deliberate piece of inattention.
When we are desperate for money for our health system, how much does our gambling industry contribute? Wouldn’t punters be paying a levy on their bets in the same way that everyone else has to pay tax on the things they buy?
Lenihan increased the horse race betting levy from 1% to 2% in the Budget, (it had been 10% before McCreevy got at it). That 2% levy, which Mr Lenihan says will generate an additional €40 million in a year, is the sole contribution of the gambling industry to government revenues. Who says so? Not me, but an article on The Lawyer website, hardly a hotbed of political radicalism
At the end of June 2008 it reported:
As Irish economic growth slows and traditional tax revenues diminish, the government’s strongest incentive to legislate could be trying to boost state revenue by taxing an industry believed to turn over in excess of e3bn (£2.36bn) every year.
It is curious that, in a country that experienced unprecedented growth during the 1990s, legislation regulating Ireland’s gambling industry dates back to 1931 and 1956. In tax terms, the only duty currently imposed is a 1 per cent betting duty for off-course betting with no specific gaming duty in place. The Irish government has failed to introduce modern legislation to deal with developments in the industry, particularly in relation to online gambling. By not imposing a gambling tax or taking steps to regulate gambling, the government has failed to capitalise on potentially significant tax revenue from the industry.
The argument is made against betting taxes that the punters would move online. All who are likely to move online have probably already done so, and why can the Government not impose a levy on transactions made from Irish bank accounts to off shore betting institutions? After all, it was the banks who caused the problems in the first place. If I have to pay 21% VAT on renewing my anti-virus subscription with a company in the United States, then a betting levy should be feasible.
Even a 10% levy on a €3 billion industry would generate €300 million a year, a lot of money to do something with. Why didn’t the minister do something?