Recently, they have announced amendments to the Tax Code. Experts are hoping these measures will help to correct some faults in the system of lottery market taxation, which hinder the development of the industry, and will allow applying the industry potential to the full extent in terms of the state treasury filling.
Under the existing system of the lottery industry taxation, one object is taxed four times. No country in the world has such practices. As time has shown, it is not only fails to fill the treasury, but also makes the industry unprofitable, seriously reducing its operation.
First of all, revenues are subject to 10% tax; further, the taxes are collected again from the prize pool; then the military duty is collected; another 18 percent is applied to a part of the revenue that is considered to be a profit. As a result, the formed prize fund is accepted as a reserve and included in the tax base once again stipulating the income tax at the rate of 18%.
Thus, the amount of the tax is higher than the marginal revenue from lotteries. Rates of the imposed taxes prohibit and eliminate this type of activity. In total, instead of nine million revenues from the budget, the treasury gets nothing. Creation of a new taxation system should facilitate the development of the lottery market.
Owners of lottery companies are expected that only major prizes will be taxed. For this reason, they will identify the minimum amount of prizes that will not be taxed. In addition, it is possible to obtain the consent on the increased amount of taxes amounted to twenty-five percent of the funds remaining after the formation of a lottery prize pool. It is only possible if the tax replaces the company's profit and taxation of small prizes.
So, they should create clear conditions that will allow people to play the lottery and taxes to stimulate the introduction of fresh kinds of lotteries due to the increase of taxable items.
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