The Bulgarian Parliament wants to lower tax on remote gambling in order to encourage offshore operators to register and pay taxes in Bulgaria.
The high taxes which are imposed on the Bulgarian online gambling industry is impeding the growth of the industry and deterring offshore operators. Presently the tax rate is 15%.
“The present taxation regime on internet gambling needs to be liberalized in a way that will attract foreign registered operators to register themselves in Bulgaria and pay their taxes here,” said Yordan Tsonev, an MP from Turkish Movement for Rights and Freedoms.
A new licensing regime, which introduced a 15% tax rate for online gaming sites, was implemented earlier this year. This naturally caused a number of licensing issues, and over 100 gambling websites were subsequently blacklisted. The Bulgarian Trade Association of Manufacturers & Operators in the Gaming Industry protested this tax which they believed was too high.
Unlicensed online gambling companies service Bulgarians by registering in other countries and providing games to Bulgarian citizens, by-passing taxation in Bulgaria. In other words, they conduct business in the grey market. One of the aims of the new tax proposition is to close this grey market and allow gambling to take place in the open. Some gambling industry experts hope that a decrease of the taxation rate would attract offshore operators to enter the Bulgarian market legally and to pay their taxes in the country.
Vice president of the Gaming Law Committee of the American Bar Association, Joerg Hofmann said, “High taxes on gambling help the black market & when people want to get into the blocked site, they will find a way.”