7 - 13 March 2001
UK budget expected to end betting facilities' Malta tax holiday
Betting tax to be cut, compulsory repatriation of British betting facilities expected
By David Lindsay
In his budget speech scheduled for today, the UK's Chancellor of the Exchequer, Gordon Brown, is expected to give the red card to Britain's Malta-based Internet betting arms such as those operated by Stanley Leisure and Unibet according to pre-budget speculation in the UK.
Mr Brown is expected to slash the high tax imposed on the betting industry in Britain, the determining factor in the presence of such high-grossing Internet betting facilities being based in low-tax Malta.
However, even more concerning is the fact that British bookmakers are expected to repatriate their offshore telephone and internet-betting operations from countries such as Malta, as a requirement of the tax slash.
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It was attractive tax packages, such as that of Malta for developing a solid Maltese e-commerce sector, which prompted the British government's search for an alternative betting tax regime.
Britain's betting industry is preparing for a revolution, with Mr Brown expected to usher out the nine per cent paid by betters on either their stake or their winnings and to usher in a tax on gross profits made by bookmakers.
The Maltese government's recently introduced e-commerce legislation is aimed at capitalising on the sector's potential. According to Finance Minister John Dalli, the Finance Ministry has taken steps to be part of e-commerce, and has taken steps in the form of establishing a competitive package, coupled with strong regulation and compliance procedures for companies choosing to set up betting operations in Malta.
The setting up of the e-commerce framework in Malta began around a year ago and, over the past 12 months, a considerable number of applications have been processed.
However, Malta's e-commerce aspirations lie not only in Internet-based betting and the government's e-commerce legislation may also prove vital to other budding Internet-based sectors such as the massive and relatively untouched retail sector.