The government of Montenegro has proposed a 15% tax rate on gambling profits as part of its financial strategy. This tax is expected to bring in an additional five million euros annually, helping to offset the revenue loss from reduced pension insurance contributions. However, the proposal has faced strong criticism from gambling operators, who warn of potential negative impacts.
This is not the first time Montenegro has attempted to tax gambling profits. In December 2014, the National Assembly passed a similar law, but it was withdrawn due to non-implementation by the Ministry of Finance and gambling operators. Due to the lack of specific implementation details, the tax was never levied, ultimately leading to its withdrawal. Now, nine years later, the new government is reintroducing this measure, hoping for successful implementation this time.
Industry Reaction
The group of gambling operators within the Chamber of Commerce has expressed serious concerns about the proposed tax. They believe that the introduction of the tax could lead to a 30% decrease in revenue for legal operators, which would negatively affect the state's revenue from variable concession fees, currently about 22 million euros and growing.
Operators are also worried that the increased tax burden might drive players to the black market or to foreign online operators not subject to this tax.
Operators are also concerned about the technical challenges of implementing the proposed tax. They argue that due to the different ways bets and profits are handled at various stages of the games, calculating and collecting taxes could become difficult, making accurate tax assessment complex.
Practices in EU Countries
In EU countries, there is no uniform approach to taxing gambling games, and member states have the authority to regulate according to their own rules. Some countries impose higher tax rates on operators, while others tax profits.
In Croatia, profits from lottery and betting games are taxed, but profits from casinos and slot clubs are not. The tax rate varies depending on the amount of profit, ranging from 10% to 30%.
