A tax increase from 1% to 2% on gambling in Ireland could hand the government a €35m ($39.9m) loss, according to a Professor of Economics at DCU.
Anthony Foley's report, which was commissioned by the Irish Bookmakers Association (IBA), said the doubling of gambling tax would have “negative economic effects on the commercial viability and sustainability of bookmakers.”
Finance Minister Paschal Donohoe believes the added 1% would raise €50m for the Irish government, something Foley outright rejects.
Foley wrote: “The assumption that a 100% increase in betting tax from 1% to 2% will double or almost double the tax revenue implies that commercial revenue will be unaffected by the tax change. It has also ignored the costs of imposing such an increase.”
The IBA claims the extra tax would place around 400 shops at the risk of closure. Foley said: “Shops with a turnover of €2m are slightly profitable at the 1% tax rate but a 2% tax rate would almost eliminate the profits.”
Sharon Byrne, chairwoman of the IBA, said: “We are hoping that Minister Donohoe will see that the tax is flawed and might consider amendment to bring in a more appropriate tax that can still bring in a lot more revenue for the Exchequer but in a fairer way.”