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The Romanian gambling industry faces a range of tough tax increases, including fees on player winnings, after the government approved an emergency ordinance and amendments to the country’s fiscal code.
The government confirmed in a press release on Friday (July 15) that it had approved new measures via two ordinances, which introduce new fees for operating gambling and amend the fiscal code to increase player winnings taxes.
Both pieces of legislation were published late on Friday in Romania’s official gazette.
Industry and government have been in negotiations for weeks over plans to raise state funds by radically raising the levy paid by gamblers on their winnings.
Lawmakers initially proposed raising what is currently a progressive rate from 1 to 25 percent to a flat 40 percent on all gambling income, with a small allowance for land-based winnings.
After several back and forth changes, the final version of the fiscal code amendments returns to a sliding scale, beginning with a 3 percent tax for all revenue from gambling up to 10,000 lei (€2,040).
But that increases to 20 percent plus a 300 lei fee for winnings between 10,000 and 66,750 lei (€13,600) and a 40 percent tax with a fee of 11,650 lei for income of more than 66,750 lei (€13,500).
The new rates come into effect from August 1.
The latest version of a companion ordinance also included a range of other changes to gambling fees, which are in effect from today (July 18).
Under the proposals, all TV and outdoor advertising will need to be notified to the National Gambling Office of Romania (ONJN) and 5 percent of the fee must be paid to the state.
Licence fees are also going up for larger businesses, with the equivalent of €312,000 due for companies with turnover in excess of roughly €10m, more than double the current €120,000 fee.
While the online sector braces to bear its new financial burden, earlier carve-outs for the land-based industry seem to have been enhanced. In the latest draft, all gambling winnings from bricks-and-mortar venues under 66,750 lei are tax exempt, with only those above that value subject to the 40 percent rate.
Although the final legislation dropped the initially proposed flat 40 percent winnings tax, gambling industry lobbyists had been hoping to soften the changes yet further and were frustrated after less punitive versions of the bills published by the government in the midst of negotiations were ramped up in the final days before they were adopted.
The changes “bring higher tax raises than expected and argued against”, noted Cosmina Simion, managing partner at the Bucarest-based law firm Simion & Baciu.
