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Anton Kuchukhidze: What taxes does the gambling industry actually pay?


Anton Kuchukhidze: What taxes does the gambling industry actually pay?


Following the first reading on the gambling tax issues, critical comments started to reappear in the media. However, one should take criticism only in one case: if its argumentation is rock-solid – something that the “experts” don’t have.


Someone really doesn’t like the professional approach taken by the Verkhovna Rada to deal with gambling taxation. In this blog, I will not focus on the identity of these critics, as these destructive forces are already well-known, especially for market participants and experts. Let us change the subject and bust some myths. Unfortunately, when choosing subjects for my blogs, I have to repeat myself, and this is not because of a shortage of topics, but because of attacks on the gambling industry.


The gambling business generates huge revenues for the national budget, and this is just the beginning – the market is growing, and it is obvious that the government profits will only increase.


Though, first things first:


(1) Licenses in Ukraine are among the most expensive both in Europe and in the world. And even this does not stop the operators from entering Ukraine’s market, as investors believe in the success of the reform and our country’s attractiveness for foreign players, as well as closely monitor the draft law on taxation.


(2) Today, gambling operators pay GGR tax. In fact, they paid it in the form of a license advance payment even before the operation started. Nevertheless, the GGR special tax is still in place.


(3) What will be the amount of GGR tax in Ukraine following the adoption of the draft law 2713-d? All operators will pay 10%. When considering this figure together with the license fee, it turns out to be quite substantial.


(4) License fees in Ukraine will not be reduced following the adoption of the draft law 2713-d. The law clearly states that only a triple fee introduced to compensate for the lack of an online monitoring system shall be abolished. That’s it. The State does not lose anything.


(5) The gambling industry pays a lot of taxes, namely:

- a large license fee;

- 18% income tax;

- 18% special GGR tax for all types of gambling, except for slots; slot halls will pay 10%;

- 19.5% tax on gambling winnings;

- 22% single social contribution per employee; and

- a lot of other are taxes paid in related areas, including VAT for certain operations, i.e. renovation of premises, payment of rent to hotels, etc.


Of course, those willing to strangle the gambling business in Ukraine will claim that taxes are being cut, but nothing could be further from the truth. If you establish 20% or 100% GGR, the country will turn into the bacchanalia it has not been able to cope with for 11 years since 2009. Do not be fooled by fake news and the arguments of those opposing the legalization. The country received more than UAH 1 billion from license fees alone in the first 7 months of 2021, and more than UAH 5 billion was raised in the gambling-related sectors, not to mention taxes which will be calculated at the end of the year.


In 2020, when only lottery license fees had to be paid, the country received only UAH 500. Feel the difference: under the same budget item in 2021, the legalization of gambling business earned the State profit of UAH 999.9 million more.


Anton Kuchukhidze, Chairman of the Ukrainian Gambling Council, exclusively for the “Ukrainian News”.



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