Legislation
India – Industry rocked by massive tax increase
By Lewis - 17 July 2023
India’s Goods and Services Tax Council has announced a new 28 per cent revenue tax on the country’s land-based and online gambling industry. The real-money games tax has caused land-based firms in India to experience dramatic falls in stock prices as markets reacted to the news, especially as the tax will be imposed upon players at the point of buy-in, when they purchase chips, not upon their winnings. The online gaming market in India has also reacted strongly to the new tax, saying that it will render the legitimate online gaming industry unviable, effectively driving consumers towards offshore and illegal platforms that pay no taxes, and will also lead to thousands of job cuts.
Shares in casino operator, Delta Corp., fell by 23 per cent as the tax was announced. The tax is also a threat to more than a thousand Indian gaming startups, which have been profitable, and now face increased costs and reduced users. There are an estimated 1,182 real-money gaming startups in India at present, of which around 95 per cent could close in response to the tax. Companies and investors plan to approach the government and the prime minister’s office to request a rethink, however, India’s decision to impose the 28 per cent tax on funds that online gaming companies collect from their customers will not need further consultation and an early review is unlikely, according to a statement from India’s revenue secretary.
