Estonia to Revise the Process of Increasing Tax Rates for Gambling Business

In Estonia, the Ministry of Finance has published a «bill» that proposes to increase taxes on online gambling, casino games and lotteries.

The Estonian Tax and Customs Board says the Ministry is proposing to increase gambling taxes based on a significant increase in online casino revenue, from 78 million Euros in 2020 to 281 million Euros in 2022 (a 260% increase).

The bill that was submitted for approval on April 26, provides for a phased increase of the tax rate. Under the proposal, the online gambling tax would increase to 6% in 2024 and 7% in 2026. The tax rate on gaming tables will increase to 10%, with the tax rate on lotteries to increase from 18% to 22%.

This way the government in Estonia hopes to generate additional revenues of €8 million in 2024 and 2025, €12 million in 2026 and €13 million in 2027. Due to the urgency of the proposed law, it is expected to come into force on January 1, 2024. The Estonian government attributes the increase in tax revenue to remote gambling operators enjoying a low tax rate of only 5%.

As of 2023, Estonia has licensed 29 online gambling operators, 14 of which are Estonian and 15 are foreign. The bill highlights that most of the gambling tax revenue comes from bets placed by players from other countries such as Finland and Germany.

The proposed law also provides tax relief for pensions and a universal tax-free income of €700 per month for citizens. To finance these changes, the government proposes to raise taxes on alcohol and tobacco trade.

Estonia’s new centrist coalition government, led by Prime Minister Kaja Kallas, has committed to reviewing the Baltic nation’s gambling laws in 2023.

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