REFORMING OF GAMBLING TAXATION IN UKRAINE IN THE CONTEXT OF THE EUROPEAN INTEGRATION
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Published:
Jan 2, 2023
Abstract
The article is devoted studding the reforming of gambling taxation in Ukraine in order to choose the most optimal model of taxation for Ukraine, taking into account the foreign experience of European countries, Ukraine’s commitments to the EU. By signing the Association Agreement with the EU, Ukraine has committed itself to bringing its national legislation in line with EU law. There are no direct commitments of Ukraine to the EU to establish some regulation of the gambling business in Ukraine. However, all European countries regulate gambling at the level of national legislation. Gambling has been allowed in Ukraine since 2020, but the current model of gambling taxation creates an excessive tax burden on the industry and contributes to the spread of illegal gambling. The article analyzes the current model of gambling taxation in relation to the cost of the license and in comparison with the tax models of other European countries. The authors conclude that European countries use a simple approach: "expensive" licenses – low taxes or "cheap" licenses – high taxes. However, Ukraine regulates gambling on the principle "expensive" licenses – high taxes, which does not contribute to the development of the legal gambling market, but on the contrary, the gambling business operates illegally. The authors also analyzed existing proposals to change the gambling tax system, as proposed in Bill №2713-d, and concluded that the proposed model contains a number of gaps that, if passed, could be used to commit crimes related to with the gambling business, and, as a consequence, to the growth of crime in Ukraine as a whole. Among the crimes related to the gambling business, the authors include: legalization of proceeds from crime (arms, drugs, smuggling, etc.); legalization of corrupt income; tax evasion, etc. In this article, the authors provide specific suggestions for improving the provisions of the bill, which will significantly reduce the risk of gambling-related crime.
How to Cite
Toporetska, Z. (2023). REFORMING OF GAMBLING TAXATION IN UKRAINE IN THE CONTEXT OF THE EUROPEAN INTEGRATION. Baltic Journal of Legal and Social Sciences, (4), 94-104. https://doi.org/10.30525/2592-8813-2022-4-12
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Keywords
gambling business, European integration, taxation, gaming gross revenue (GGR), winnings taxation, gambling crimes, corrupt income, money laundering
References
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8. Informatsiya shchodo nayavnosti u sub'yekta hospodaryuvannya prava na provadzhennya diyalʹnosti z orhanizatsiyi ta provedennya azartnykh ihor [Information on whether the business entity has the right to conduct activities related to the organization and conduct of gambling] Ofitsiynyy vebsayt Komisiyi z rehulyuvannya azartnykh ihor ta loterey. [Official website of the Commission for the Regulation of Gambling and Lotteries]. Retrieved from https://gc.gov.ua/ua/Litsenziini-reiestry.html [in Ukrainian]. (2022, May, 02).
9. Julie Smith (2000) Gambling Taxation: Public Equity in the Gambling Business. The Australian Economic Review. no. 33 (2), p. 120-144. [in English].
10. Kryminalnyy kodeks 2001 (Verkhovna Rada Ukrayiny). [Criminal Code 2001 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/2341-14#Text [in Ukrainian]. (2022, May, 02).
11. Lyskov M. O. (2017). Publichne administruvannya lotereynoyi sfery [Public administration of lottery sphere]. Doctor’s thesis. 417 р. [in Ukrainian].
12. Osyka S. G. (2011). Gosudarstvennoye regulirovaniye global'noy industrii igr [State regulation of global gambling industry]. Кyiv. K.I.S. 528 р. [in Russian].
13. Paul M. Mason, Harriet Stranahan (1996) The effects of casino gambling on state tax revenue. Atlantic Economic Journal. no. 24, 336–348. [in English].
14. Petrychko N. O. (2010) Nezakonnyy hralʹnyy biznes: kryminalʹno-pravove ta kryminolohichne doslidzhennya [Illegal gambling: criminal-law and criminological research]. Candidate’s thesis. 240 р. [in Ukrainian].
15. Philander, K. S. (2013). A normative analysis of gambling tax policy. UNLV Gaming Research & Review Journal, 17(2). P. 17–26. Retrieved from https://digitalscholarship.unlv.edu/grrj/vol17/iss2/2/[in English]. (2022, May, 02).
16. Pinyaga R. O. (2015) Rozsliduvannya zlochyniv, pov'yazanykh z hralʹnym biznesom [Investigation of crimes related to gambling]. Extended abstract of candidate’s thesis. 21 р. [in Ukrainian].
17. Podatkovyy kodeks 2010 (Verkhovna Rada Ukrayiny).[Tax Code 2010 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/2755-17 [in Ukrainian]. (2022, May, 02).
18. Pohoretskyi M. A., Toporetska Z. M. (2015) Rozsliduvannya zaynyattya hralʹnym biznesom: protsesual ʹni ta kryminalistychni zasady [Investigation of gambling business: procedural and forensic principles]. Кyiv. Alerta. 250 р. [in Ukrainian].
19. Proekt Zakonu pro vnesennya zmin do Podatkovoho kodeksu Ukrayiny ta inshykh zakoniv Ukrayiny shchodo opodatkuvannya dokhodiv vid diyalʹnosti z orhanizatsiyi ta provedennya azartnykh ihor ta loterey 2020 (Verkhovna Rada Ukrayiny). [Draft Law on Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Taxation of Income from the Organization and Conduct of Gambling and Lotteries 2020 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=67840 [in Ukrainian]. (2022, May, 02).
20. Toporetska Z.M. (2019) Vyhrash u lotereyu yak sposib lehalizatsiyi koruptsiynykh dokhodiv [The lottery winning as a way to legalize corrupt income]. International scientific and practical conference New challenges of legal science in Ukraine and EU countries (April 19–20, 2019, Miskolc, Hungary). Miskolc: IzdevniecibaBaltija Publishing, Р. 399–402. [in Ukrainian].
21. Vysotska V. V. (2016) Zaynyattya hralʹnym biznesom: kryminalʹno-pravovyy analiz zlochynu [Conduction of gambling business: criminal and legal analysis of the crime]. Extended abstract of candidate’s thesis. 20 р. [in Ukrainian].
22. Zakon pro derzhavne rehulyuvannya diyalʹnosti shchodo orhanizatsiyi ta provedennya azartnykh ihor 2020 (Verkhovna Rada Ukrayiny). [Law On state regulation of activities related to the organization and conduct of gambling 2020 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/rada/show/768-20#n1162 [in Ukrainian]. (2022, May, 02).
23. Zakon pro Zahalʹnoderzhavnu prohramu adaptatsiyi zakonodavstva Ukrayiny do zakonodavstva Yevropeysʹkoho Soyuzu 2004 (Verkhovna Rada Ukrayiny). [Law On the National Program for the Adaptation of the Legislation of Ukraine to the Legislation of the European Union 2004 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/1629-15#Text [in Ukrainian]. (2022, May, 02).
24. Zakon pro zapobihannya ta protydiyu lehalizatsiyi (vidmyvannyu) dokhodiv, oderzhanykh zlochynnym shlyakhom, finansuvannyu teroryzmu ta finansuvannyu rozpovsyudzhennya zbroyi masovoho znyshchennya 2019 (Verkhovna Rada Ukrayiny). [Law On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of the proliferation of weapons of mass destruction 2019 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/361-20#Text [in Ukrainian]. (2022, May, 02).
25. Zvit za rezulʹtatamy doslidzhennya rynku z vypusku ta provedennya loterey 2018 (Antymonopolʹnyy komitet Ukrayiny). [Report on the results of market research on the issuance and conduct of lotteries 2018 (Antimonopoly Committee of Ukraine)]. Ofitsiynyy sayt Antymonopolʹnogo komitetu Ukrayiny. [The official website of the Antimonopoly Committee of Ukraine]. Retrieved from https://amcu.gov.ua/storage/app/sites/1/Docs/doslidzhennya_rynkiv/%D0%97%D0%B2%D1%96%D1%82%20%D0%BB%D0%BE%D1%82%D0%B5%D1%80%D0%B5%D1%97.pdf [in Ukrainian]. (2022, May, 02).
2. Dorohykh V. M. (2004). Administratyvno-pravove rehulyuvannya hralʹnoho biznesu v Ukrayini [Administrative and legal regulation of gambling business in Ukraine]. Extended abstract of candidate’s thesis. 19 р. [in Ukrainian].
3. Douglas M. Walker, John D. Jackson (2011) The effect of legalized gambling on state government revenue. Contemporary economic policy. no. 29 (1), p. 101–114. [in English].
4. Dyrektyva pro spilʹnu systemu podatku na dodanu vartistʹ 2006 (Yevropeysʹkyi Parlament i Rada) [Directive On a common system of value added tax 2006 (the European Parliament and of the Council)] Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/994_928#Text [in Ukrainian]. (2022, May, 02).
5. Dyrektyva pro zapobihannya vykorystannyu finansovoyi systemy dlya vidmyvannya hroshey ta finansuvannya teroryzmu, shcho vnosytʹ zminy do Rehlamentu no. 648/2012 Yevropeysʹkoho Parlamentu ta Rady i prypynyaye diyu Dyrektyvy 2005/60/EC 2015 (Yevropeysʹkyi Parlament i Rada) [Directive On the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, amending Regulation (EU) no. 648/2012 of the European Parliament and of the Council and repealing Directive 2005/60/EC 2015 (the European Parliament and of the Council)] Ofitsiynyy sayt Derzhavnoyi sluzhby finansovoho monitorynhu Ukrayiny. [The official website of the State Financial Monitoring Service of Ukraine]. Retrieved from https://fiu.gov.ua/pages/dijalnist/mizhnarodne-spivrobitnictvo/mizhnarodni-standarti/direktivi_es/direktivi-Jes.html [in Ukrainian]. (2022, May, 02).
6. Dyrektyva Shchodo posluh na vnutrishnʹomu rynku 2006 (Yevropeysʹkyi Parlament i Rada) [Directive On services in the internal market 2006 (the European Parliament and of the Council)] Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/994_906#Text [in Russian]. (2022, May, 02).
7. Getmantsev D.O. (2008). Azartna hra v ukrayini ta za kordonom [Hazart game in Ukraine and abroad]. Кyiv. SEEM Print. 209 p. [in Ukrainian].
8. Informatsiya shchodo nayavnosti u sub'yekta hospodaryuvannya prava na provadzhennya diyalʹnosti z orhanizatsiyi ta provedennya azartnykh ihor [Information on whether the business entity has the right to conduct activities related to the organization and conduct of gambling] Ofitsiynyy vebsayt Komisiyi z rehulyuvannya azartnykh ihor ta loterey. [Official website of the Commission for the Regulation of Gambling and Lotteries]. Retrieved from https://gc.gov.ua/ua/Litsenziini-reiestry.html [in Ukrainian]. (2022, May, 02).
9. Julie Smith (2000) Gambling Taxation: Public Equity in the Gambling Business. The Australian Economic Review. no. 33 (2), p. 120-144. [in English].
10. Kryminalnyy kodeks 2001 (Verkhovna Rada Ukrayiny). [Criminal Code 2001 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/2341-14#Text [in Ukrainian]. (2022, May, 02).
11. Lyskov M. O. (2017). Publichne administruvannya lotereynoyi sfery [Public administration of lottery sphere]. Doctor’s thesis. 417 р. [in Ukrainian].
12. Osyka S. G. (2011). Gosudarstvennoye regulirovaniye global'noy industrii igr [State regulation of global gambling industry]. Кyiv. K.I.S. 528 р. [in Russian].
13. Paul M. Mason, Harriet Stranahan (1996) The effects of casino gambling on state tax revenue. Atlantic Economic Journal. no. 24, 336–348. [in English].
14. Petrychko N. O. (2010) Nezakonnyy hralʹnyy biznes: kryminalʹno-pravove ta kryminolohichne doslidzhennya [Illegal gambling: criminal-law and criminological research]. Candidate’s thesis. 240 р. [in Ukrainian].
15. Philander, K. S. (2013). A normative analysis of gambling tax policy. UNLV Gaming Research & Review Journal, 17(2). P. 17–26. Retrieved from https://digitalscholarship.unlv.edu/grrj/vol17/iss2/2/[in English]. (2022, May, 02).
16. Pinyaga R. O. (2015) Rozsliduvannya zlochyniv, pov'yazanykh z hralʹnym biznesom [Investigation of crimes related to gambling]. Extended abstract of candidate’s thesis. 21 р. [in Ukrainian].
17. Podatkovyy kodeks 2010 (Verkhovna Rada Ukrayiny).[Tax Code 2010 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/2755-17 [in Ukrainian]. (2022, May, 02).
18. Pohoretskyi M. A., Toporetska Z. M. (2015) Rozsliduvannya zaynyattya hralʹnym biznesom: protsesual ʹni ta kryminalistychni zasady [Investigation of gambling business: procedural and forensic principles]. Кyiv. Alerta. 250 р. [in Ukrainian].
19. Proekt Zakonu pro vnesennya zmin do Podatkovoho kodeksu Ukrayiny ta inshykh zakoniv Ukrayiny shchodo opodatkuvannya dokhodiv vid diyalʹnosti z orhanizatsiyi ta provedennya azartnykh ihor ta loterey 2020 (Verkhovna Rada Ukrayiny). [Draft Law on Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Taxation of Income from the Organization and Conduct of Gambling and Lotteries 2020 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=67840 [in Ukrainian]. (2022, May, 02).
20. Toporetska Z.M. (2019) Vyhrash u lotereyu yak sposib lehalizatsiyi koruptsiynykh dokhodiv [The lottery winning as a way to legalize corrupt income]. International scientific and practical conference New challenges of legal science in Ukraine and EU countries (April 19–20, 2019, Miskolc, Hungary). Miskolc: IzdevniecibaBaltija Publishing, Р. 399–402. [in Ukrainian].
21. Vysotska V. V. (2016) Zaynyattya hralʹnym biznesom: kryminalʹno-pravovyy analiz zlochynu [Conduction of gambling business: criminal and legal analysis of the crime]. Extended abstract of candidate’s thesis. 20 р. [in Ukrainian].
22. Zakon pro derzhavne rehulyuvannya diyalʹnosti shchodo orhanizatsiyi ta provedennya azartnykh ihor 2020 (Verkhovna Rada Ukrayiny). [Law On state regulation of activities related to the organization and conduct of gambling 2020 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/rada/show/768-20#n1162 [in Ukrainian]. (2022, May, 02).
23. Zakon pro Zahalʹnoderzhavnu prohramu adaptatsiyi zakonodavstva Ukrayiny do zakonodavstva Yevropeysʹkoho Soyuzu 2004 (Verkhovna Rada Ukrayiny). [Law On the National Program for the Adaptation of the Legislation of Ukraine to the Legislation of the European Union 2004 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/1629-15#Text [in Ukrainian]. (2022, May, 02).
24. Zakon pro zapobihannya ta protydiyu lehalizatsiyi (vidmyvannyu) dokhodiv, oderzhanykh zlochynnym shlyakhom, finansuvannyu teroryzmu ta finansuvannyu rozpovsyudzhennya zbroyi masovoho znyshchennya 2019 (Verkhovna Rada Ukrayiny). [Law On prevention and counteraction to legalization (laundering) of proceeds from crime, financing of terrorism and financing of the proliferation of weapons of mass destruction 2019 (Verkhovna Rada of Ukraine)]. Ofitsiynyy sayt Verkhovnoyi Rady Ukrayiny. [The official website of the Verkhovna Rada of Ukraine]. Retrieved from https://zakon.rada.gov.ua/laws/show/361-20#Text [in Ukrainian]. (2022, May, 02).
25. Zvit za rezulʹtatamy doslidzhennya rynku z vypusku ta provedennya loterey 2018 (Antymonopolʹnyy komitet Ukrayiny). [Report on the results of market research on the issuance and conduct of lotteries 2018 (Antimonopoly Committee of Ukraine)]. Ofitsiynyy sayt Antymonopolʹnogo komitetu Ukrayiny. [The official website of the Antimonopoly Committee of Ukraine]. Retrieved from https://amcu.gov.ua/storage/app/sites/1/Docs/doslidzhennya_rynkiv/%D0%97%D0%B2%D1%96%D1%82%20%D0%BB%D0%BE%D1%82%D0%B5%D1%80%D0%B5%D1%97.pdf [in Ukrainian]. (2022, May, 02).