Financial Services, Latvia, Law and Regulations, Markets and Companies

He said the Finance Ministry had estimated that the move would bring additional EUR 12-15 mln to the state budget but the gambling industry players had analyzed several scenarios and concluded that due to the optimization measures that they will take the central government and local government budgets will lose at least EUR 2 mln of revenues from different other taxes.

If the gambling tax is raised by 30%, the industry players will have to reduce the number of gaming equipment by 20%, the number of gaming halls by 15% and the number of employees by 10% which means that revenues to the state budget will inevitably decrease. Layoffs would mean increase of the social budget expenditure and there might also be salary cuts to those gaming industry employees, who kept their jobs, which would have negative effect on consumption, Andzans said.

He pointed out that in 2013 the gaming business association and the Finance Ministry signed an agreement about not raising the gambling taxes until 2019 when a universal gambling control and supervision system is to be put into operation. If this agreement is breached, the government will have to decide on extending the deadline for introduction of the system or scrapping the idea altogether. "Otherwise the gambling businesses may consider taking the government to the court for breaking the principle of legitimate expectations and causing them losses," the representative of the gaming association said.

On January 1, 2017, gambling taxes were already increased from EUR 3,141.7 to EUR 3,204 for each gambling machine and from EUR 17,279.36 to EUR 18,000 for each gambling table despite objections from the Latvian Association of Gaming Business and the Latvian Confederation of Employers.