Verkhovna Rada, the legislative body of Ukraine, has decided to read a gambling tax bill for the country a second time. Just a few days ago, lawmakers tried to push the proposals through with a single vote but did not have enough support to do so.

Bill 2713-D

Back in February, a legislative committee introduced 2713-D. The bill would set a 10% tax rate on gross revenues earned from all gambling verticals in Ukraine. Winnings from gambling are taxed at UAH48,000 ($1,745). The proposals would also remove an increase in license fees that would apply to operators until a central monitoring system was created for the industry.

In the past, tax plans for the industry called for a rate ranging from 10% to 30% depending on the gaming vertical. The new plan lowers the percentage considerably, putting each vertical on the same playing field.

Legislature voted on passing the bill into law without a second reading, which led to a vote of 217-59 with 55 members deciding to abstain or not vote. The bill was short of its needed 226 votes in approval, so it now requires a second reading to move forward.

The bill was originally scheduled to be read in late May, but the vote was pushed to this month. The tax bill has been subjected to criticism, with the Scientific and Expert Management Committee of Verkhovna Rada stating that the rate should be higher. The committee feels that more should be paid to protect budgets on a state and local level.

Newly Regulated Industry

Ukraine just recently legalized gambling, after legislation was passed in mid-2020. A bill known as 2285-D was passed by parliament with a vote of 248 to 95, then sent to President Volodymyr Zelensky who signed it not long after receiving it.

Land-based gambling and online casino gaming were prohibited for years, so the change was a big one in Ukraine. For operators to get started, large licensing fees had to be paid. In Kiev, operators needed to pay around $4.5 million to get started. Those located in other areas, have a lower $2.6 million fee.

Online gaming operators can obtain licensing in Ukraine for a five-year time frame with a $1.1 million license rate. For bookmakers, the rate is around $2.6 million. After passing the legislation, the government was tasked with creating a commission to oversee the new industry and create the tax laws.

As you can see, the tax issue is still under consideration. In the beginning, there were five different proposals. It has taken some time for lawmakers to come to an agreement on how the taxation of the industry should take place.