Ireland could withdraw Paschal Donohoe’s 2% tax plans

by Luke Andrews, 17 April 2019

The Irish government could be set to drop its new policy of a 2% turnover tax on the industry.

The government is reportedly seeking approval for the plan from the EU. © Pixabay.

The decision has been under review and according to inside sources, a new two-tiered tax system is being considered. The new system would see online operators charged 20% tax and land-based 10% on gross profits.

The Irish Independent reported the news this week. The Independent believes that the Irish government is currently seeking approval from the European Union (EU), and understands that the EU approves the plan in theory, but awaits further details and clarifications.

It is also understood that multiple suggestions are being considered alongside the two-tiered plan.

Paschal Donohoe, who announced the 2% tax last year, said:

During the course of the Finance Bill process I agreed to review an alternative proposal put forward by the betting sector, and I acknowledge that small independent bookmakers may have difficulty competing with larger bookmakers. My officials are now considering this proposal. We are considering whether it is compatible with a core element of EU rules, and will set out our analysis of this and options in respect of it in papers of the Tax Strategy Group, which should be published in July.– Paschal Donohoe, Irish finance minister

A two-tiered plan originally came from the industry itself, who has constantly warned of the damaging effects the 2% plan would have. Paddy Power Betfair chairman Gary McGann wrote to Donohoe in October last year outlining his thoughts of the effect on the industry. McGann said that the plan would be the end of Ireland’s independent sector and that it would benefit foreign investment and operators, as well as lead to job losses and shop closures in Ireland.

The Independent said that 15 shops have already closed due to the tax increase this year.

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