Posted on: December 21, 2022, 10:40h.
Last updated on: December 21, 2022, 10:40h.
This past May, Armenia’s Parliament introduced cashless gambling in the country, forcing transactions to take place directly through the banks. It has now gone a step further, introducing new regulations to increase taxes and create new restrictions on the industry.
A bill that sought to increase taxes for the gambling ecosystem found enough success to become law, according to local media outlet ArmenPress. On a second and final reading, lawmakers approved the measure, with 60 approving it and six abstaining.
This means that online gaming operators will now have to prepare to start giving up more of their revenue to the government. Or, as has been seen in other countries, they could give up completely and let offshore operators take over.
Cost Vs. Benefits
The legislative amendments survived their first reading, which legislators held earlier this month. They will now lead to changes to the country’s gaming license framework, as well as taxes.
Any form of Internet gambling will carry a quota system based on their activity. Gambling or betting that offers winnings will have to purchase the right to do so. When the new tax regime begins on July 1 of next year, online gambling operators will have to pay AMD175 million (US$443,100) for a license to accept up to AMD100 billion (US$254.1 million) in wagers.
Bookmakers will pay AMD50 million (US$126,600) for a license to accept bets of up to AMD50 billion (US$126.6 million). Media outlet Arka adds that, in both cases, operators will have to pay AMD175 million in tax for every AMD100 billion in revenue. The new fees are on top of the AMD600 million (US$1.52 million) operators now pay for their licenses, according to ArmenPress.
Deputy Minister of Finance Arman Poghosyan said that the new framework is justified. In his estimation, the fact that the gaming industry’s turnover in the country has reached AMD4.2 billion (US$10.6 billion) from AMD140 billion (US$354.48 million) five years ago warrants an increase in taxes.
Tax revenue in Armenia is at an all-time high. This past October, the State Revenue Committee (SRC) reported that it had collected AMD1.412 trillion (US$3.57 billion) in various taxes in the first nine months of the year.
This was 5.8% more than the government budgeted for the period. It was also 24.2% higher than the amount it collected in the same period last year, according to the SRC.
The largest amounts of tax revenue came from mining (8%), tobacco (3.7%), banking and software (3.1% each) and electricity and gas supply (3%).
Days after introducing the changes to the gaming industry’s tax regime, lawmakers took another stab at the industry. Arka reported today that sweeping changes are coming to how companies in the media industry can brand themselves.
Media outlets will have to change their names if they have any similarity to gambling companies. They have six months to do so or risk losing their licenses.
Arka’s description of the law change indicates that it applies to a wide range of companies. Initially, the law would include those entities that began operating within the past five years. However, a last-minute change to the language extended this to 10 years.