Thursday, 14 February 2019
Ceisteanna Eile - Other Questions
8. To ask the Minister for Finance if the report on the impact of the increase in betting tax to date will be accelerated in view of the reported impact this measure is having on the sector. [7339/19]
During the Finance Bill, the Minister gave a very clear commitment to the House that in the first quarter of this year he would undertake a review of the impact of the increase in betting tax on that industry. Where stands that review now?
The increase in the betting duty rate from 1% to 2%, and the betting intermediary duty rate from 15% to 25%, came into effect on 1 January. At this point in the year it is still too early to draw any conclusions on the impact of these increases. Receipts from betting duty represented less than 1% of all excise receipts in 2017 and this is likely to be the case in 2018. In addition, there is no VAT applied on betting transactions. During the debate, I outlined why I consider the betting sector needs to make a fair contribution to the Exchequer.
During the course of the Finance Bill process I agreed to review an alternative proposal put forward by the betting sector, and I acknowledge that small independent bookmakers may have difficulty competing with larger bookmakers. My officials are now considering this proposal. We are considering whether it is compatible with a core element of EU rules, and will set out our analysis of this and options in respect of it in papers of the tax strategy group, which should be published in July.
While I welcome the fact the Minister is undertaking the review, that he is waiting until July to publish it is simply not good enough. Ten shops have already closed since 1 January. That is 50 jobs lost since then. Nine of the ten shops are independent bookmakers, not multinationals but small, family-owned businesses. There are about 50 other small, independent bookmakers hanging on by their fingertips. They have been able to manage through their banks and financial backers to negotiate a package to keep them trading at a loss until the end of the first quarter because the Minister gave a clear commitment to the Dáil during the Finance Bill that this would be done in that period, not July. Given that his officials are re-examining the proposal, will the Minister accelerate the publication of that data with a view to considering the necessary amendments to protect small family businesses, as promised, by the end of the first quarter this year?
The specific commitment that I gave, as the Deputy will, I hope, remember, is that we would consider the issue quickly at the start of this year, which we are doing. As he will be aware, we are experiencing a trend at the moment where we are seeing change within independent bookmakers because of changes that have happened in consumer behaviour and because of the growth of larger companies here. I will check with the officials regarding where this work stands. As I have said to the Deputy, we are now assessing whether this alternative proposal could be compatible with EU rules and following up on what he said, I will get a further update on it.
I welcome that because I am not being alarmist. Ten shops have closed because of this measure that the Government introduced, three in my own constituency Edgeworthstown, Athlone and Rochfortbridge. They were all small family businesses which had no option but to close their doors. The Minister is now saying that he will look into this, on foot of what I have asked him to do, to accelerate the publication, and hopefully, take on board what the industry is saying, because in fairness it has offered an alternative. It is not looking to have this reversed with no alternative in place. It has proposed an alternative that will give the Minister more than what he hoped his measure would introduce.
We did try to find alternative ways of doing this last year. We engaged with the sector and we worked in last year's tax strategy group process but I recall the debate we had in the House about this on the Finance Bill and I said that we would look to see if an alternative and credible way was to be found of doing this. As the Deputy might appreciate, I am surrounded by sectors who are always claiming that they have different ways of raising even larger amounts than any change that we make in any budget or Finance Bill. They will always make the case that there is a better way of raising more money that is less harmful to them. I said in the debate on the Finance Bill that we would consider another proposal. I have acknowledged the work under way on this but I will see where that stands and get an update on it from the Department.