Ukraine’s Legislature has given the green light to a proposed piece of legislation that is seeking to set gambling taxes in the country. Now, thanks to the Verkhovna Rada, the bill is to move forward to a second reading even though a previous attempt for the proposal to get approval failed as it fell short of the necessary number of votes.
The proposed piece of legislation is called Bill 2713-D. It was first unveiled by a legislative committee in February 2021 and, as mentioned above, seeks to set a gambling tax rate of 10% on the gross revenue generated by all verticals in the sector. Reportedly, gambling winnings are taxed at UAH48,000, with the sum being eight times the annual minimum wage in Ukraine.
The proposed bill also annuls a 3-fold increase in license fees that would have been implemented in the gambling sector until a central monitoring system for the industry is officially established in Ukraine. Previously, the local Legislature has unveiled plans to impose a gambling tax in the range of 10% to 30% of gross revenue on the different verticals across the sector.
The Verkhovna Rada Wanted to Directly Pass the Gambling Tax Bill on First Hearing
First, the Verkhovna Rada voted on whether to pass the proposed piece of legislation into law directly, without having a second reading of the bill. At the time, the number of deputies who voted for the bill prevailed over the ones against it, by a 217 to 59 margin, but 55 members of the Legislature either abstained or did not vote. Because of this, the bill did not manage to gather the 226 votes required to pass the proposed piece of legislation directly, without the need for a second reading.
After the failure of the vote, deputies from the Rada voted on whether to instead simply pass the bill to a second reading. At this time, 229 members of the Legislature voted in favor of the bill and 58 voted against it, which allowed it to pass.
Previously, the first reading of the bill was scheduled for May 19th, but this vote was delayed to the beginning of June. Now, the country’s Legislature finally decided to send the gambling tax bill to a second hearing.
In May 2021, just before the originally scheduled vote, the tax bill faced criticism by the Verkhovna Rada’s Scientific and Expert Management Committee. According to the Committee, the gambling taxes should be higher in order to protect the state and local budgets. It also claimed that gambling could have some negative effects on society, so the industry taxes should be bigger to limit consumption through higher rates.
The bill has not come into effect, but the country’s regulator – the Gambling Commission (KRAIL) – has already approved the first licensees in the country. The international sports betting operator Parimatch and online gambling company Spaceiks have been the first ones who received licenses to offer their services in Ukraine. They are supposed to pay the due license fees even before the local authorities officially grant them the permits.