Gettmansev seeks significant funding, approximately 7 billion, via gambling activities.
Cashing In on the Gaming Industry: A Crusade Against Tax Evasion in Ukraine
It's no secret that Ukraine's gaming industry has long been plagued by tax evasion issues, with unlicensed operators using dubious tactics to shirk their tax responsibilities. According to Getmanets, the chair of the committee, the issue is not just about taxation, but about an entire industry evading taxes through deceitful practices like miscoding and fraud with non-cash accounts.
In an interview with Glavkom, Getmanets revealed that the gaming companies, now out of the shadows, should be coughing up a staggering 7 billion annually. Each enterprise will undergo an audit, and for each, it will be determined individually how much they owe in back taxes.
Getmanets has already hinted at making changes to the law on gambling business, potentially revoking a company's license if they default on their tax payments. In a conversation with Interfax-Ukraine, he emphasized the importance of increasing pressure on these operators and ensuring compliance with the law, especially for 2022.
Ukraine's government, recognizing the severity of the problem, took significant steps in December 2024 by dismantling the previous regulatory body and introducing stricter gambling restrictions. The new national gambling regulator, PlayCity, was established to not only curb illegal operations, tax evasion, and other illicit practices within the gambling sector but also to create a transparent, coordinated ecosystem.
PlayCity has been empowered to collaborate with law enforcement, tax authorities, and other relevant bodies to nip violations in the bud and enhance regulatory effectiveness. The regulator will leverage digital tools, like an online monitoring system, to keep tabs on transactions from licensed gambling operators in real-time, enhancing transparency, player safety, and compliance with tax obligations.
While specific yearly figures for unpaid taxes by the gaming industry are scarce, the general context suggests a substantial extent of unlicensed gambling and tax evasion. According to reports, legal operators have been contributing significant license fees, implying a structured licensing fee system. However, the activities of illegal operators mean that the state is missing out on substantial revenues.
The government has plans to conduct audits and enforce compliance through the new regulator and increased cooperation among authorities to eliminate loopholes exploited by illegal entities. Restrictions on gambling advertising and market access, introduced in late 2024, are part of broader efforts to curb illegal activity and tax evasion.
For a more in-depth look, check out the articles on sporting.net, like the one about KRAIL approving the unification of registers or the intriguing piece on gaming in the Netherlands, where the country's budget saw a €1 billion boost from the industry.
The gaming companies, now under the watchful eye of PlayCity, should be prepared to pay a substantial amount in back taxes, potentially amounting to 7 billion annually. Getmanets, in an interview with Interfax-Ukraine, emphasized the importance of increasing finance revenue through stricter enforcement and compliance in the gaming industry, especially for the year 2022.
