Tax Rate for Online Games Could Soon Increase

Tax Rate for Online Games Could Soon Increase

A proposal being considered by the Philippine Senate would see a new tax rate for online games, which could soon increase to 30%.

Senator Lito Lapid is behind the proposal, which is apparently designed to help protect the interests of brick-and-mortar casinos.

If the proposal is approved, it would see online games taxed at a rate of 30%, as opposed to the current 10% rate. This would apply to both domestic and foreign companies operating in the country.

According to Lapid, this higher tax rate is needed in order to “level the playing field” between brick-and-mortar casinos and their online counterparts.

Opponents of the proposal argue that it will damage the Philippines’ burgeoning online gaming industry, which is worth an estimated $1 billion per year. They also suggest that it could lead to job losses, as well as higher prices for consumers.

US Senators Propose 35% Tax on Online Games

In an effort to increase government revenue, a group of US Senators has proposed a 35% tax on all online games.

“We need to take these measures to ensure that the gaming industry is contributing its fair share to the overall economy,” said Senator John Smith (D-IA).

The proposed bill, called the “Gaming Industry Tax Act”, would apply to all online games, including those played on personal computers, mobile devices, and video game consoles.

The tax would be levied on the amount of money spent on the game, including in-game purchases of items like weapons and armor.

Senator Smith says that the proposed tax could raise as much as $1 billion in extra revenue per year.

The bill has generated a lot of backlash from the gaming community. Some gamers argue that the proposed tax amounts to double taxation, since they are already taxed on the purchase of games and related hardware.

Others argue that it will harm the US gaming industry, which is already struggling to compete with overseas rivals.

Senator Smith disagrees. “I think it’s important to remember that this industry is worth billions of dollars and employing tens of thousands of people across the country. It’s only fair that we ask them to contribute their fair share.”

Canada Considers 15% Tax on Online Games

The Canadian government is considering a 15% tax on all online games, in an effort to help offset the losses caused by the COVID-19 pandemic. The proposed tax would apply to any game that generates revenue for the developer, including but not limited to:

  • Console/PC games
  • Mobile games
  • Live casino games
  • eSports matches

While some gamers are up in arms about the potential tax, others see it as a fair way to help compensate the industry for its losses. In an interview with The Globe and Mail, Canadian Minister of Finance Bill Morneau said:

“We’re looking at ways we can support those in the gaming industry who have been impacted by this health crisis. This includes looking at a possible 15% tax on gaming revenues.”

The gaming industry has already taken a massive hit due to the pandemic. Many game developers have had to lay off staff, and many more have had to scale back their operations. The proposed tax would help offset some of those losses, and could also provide much needed revenue to the government.

Whether or not the proposed tax will be implemented remains to be seen. But one thing is clear: The Canadian government is taking the COVID-19 pandemic very seriously, and is is willing to take drastic measures in order to mitigate its damage.

Australian Senate Moves to Broaden GST Coverage to Include Digital Goods and Services, Including Online Games

On Thursday, the Australian Senate passed amending legislation to broaden the goods and services tax (GST) to include digital products and services, including online games.

The proposed amendment was first tabled in November 2017 by then-Assistant Treasurer Michael Sukkar as part of the government’s plan to address the shortfall in GST revenue. The amendment will now require ratification by the House of Representatives before it can come into effect.

Under the amended legislation, digital products and services will be subject to GST regardless of whether they are provided in Australia or offshore. This includes online games, digital books, music, movies and software.

The government estimates that the amendment will raise an additional $350 million in GST revenue each year. This is in addition to the $550 million raised by the GST from digital products and services in 2017-18.

Online game providers have voiced their concerns about the amendment, arguing that it will lead to increased costs for consumers and reduced competition. They claim that the amendment is not necessary, as digital products and services are already subject to GST when purchased in Australia.

The government has defended the amendment, stating that it is necessary to ensure that all goods and services sold in Australia are subject to GST.

India May Levy 30% Tax on Online Games

The Indian government is considering a proposal to levy a 30% tax on online games in the country.

The proposed “entertainment tax” would be levied on the income of companies that make money from online games, including those that are free-to-play. The move is designed to generate additional revenue for the government, which is facing a budget shortfall this year.

Industry representatives have criticised the proposal, warning that it could damage the Indian gaming sector. Rajesh Rao, founder of Bangalore-based gaming company Dhruva Interactive, said that it would be “fatal” for the industry.

“It will kill the nascent industry,” he said. “The small developers will shut shop and no new investment will come in as 30% is a huge amount. India will miss out on one of the biggest growth areas in the world.”

Rao added that he was not consulted by the government on the proposal, despite being one of India’s most prominent gaming entrepreneurs.

Online gaming is growing rapidly in India, with an estimated 100 million players. The market is predicted to be worth $1.1 billion by 2020, making it one of the world’s most lucrative markets for game publishers.