TURNOVER TAX AND TAXATION ON ALL WINNINGS IS GOING TO UNDERMINE LICENSED GAMING MARKET IN BOSNIA AND HERCEGOVINA
European Organization for Gaming Law (EOGL) urges The Bosnia and Hercegovina Government to reconsider the publicly expressed intention to amend the existing gaming law and adopt reasonless turnover tax of 10% and tax on players winnings of 10%.
EOGL indicated all negative effects of such tax regime to the BH Ministry of Finance and appealed to the Government to organize public discussion, including independent experts, organizers and governmental representatives with the aim to find the best solution.
According to the experience of numerous countries and companies around the World, profit margin in the gaming business is max at 10% of the turnover and sometimes it can be even negative. Also, taxation on all winnings which is proposed too, usually directs players to unlicensed organizers.
Both of those taxes adopted separately or simultaneously would undermine licensed market in Bosnia and Hercegovina.
By adopting turnover taxation, legal operators will be forced to offer higher prices (compared to those offered by illegal operators) to their customers in order to cover their losses and consequently they will lose a very large proportion of their sales. As a result, a considerable number of legal operators will exit from the market, especially those already operating on thin margins.
In connection with the intention of BH Government to impose tax on all winnings, EOGL emphasizes that many factors make the attractiveness of an operator, but the net payout ratio is one of the most important. In that way, taxation on all winnings (especially on the smallest winnings) will put pressure on players to stop betting with legal companies and seek out more attractive betting opportunities with online operators outside Federation of Bosnia and Hercegovina. Or even worse, the players could be involved with illegal black market operators within Federation of Bosnia and Hercegovina.
Finally, several thousands of jobs in gaming companies would be lost, the Government would collect fewer taxes and black market would rise with all additional negative effects.