Page 31 - GEORptFeb22

6.2 Taxation
Georgia drafts strict taxation and regulations for gambling industry
The Georgian Ministry of Finance on November 29 unveiled a detailed model for the regulation and taxation of the gambling industry, which prohibits those aged under 25, public officials and vulnerable citizens (altogether over 25% of the country’s population) from gambling. Taxation is rising by 65%-70% as an effect of the new regulations as well.
Advertising is banned, gambling abroad is banned and family members can ask in court for an individual ban for gambling.
Restrictions are not imposed against foreign nationals gambling in Georgia. The reforms are justified by Georgian authorities as a way of mitigating the social impact of the industry.
The changes were announced by Prime Minister Irakli Gharibashvili one week earlier.
Minister of Finance Lasha Khutsishvili told BMG that in the near future the issue will be discussed with the interested parties, and the parliamentary discussions of the initiative will begin.
At the same time, Lasha Khutsishvili states that he does not agree with the assessment of the Gambling Business Association that “the sector will return 20 years with the planned changes”.
"I do not know why the sector’s representatives say that this regulation will bring us back 20 years; if we look at the scale of regulation now, this business is regulated in all countries of the world and quite strictly. I cannot share the statement that regulating the gambling business should be some kind of surprise for anyone. Globally, there are different age limits and in some places, it [gambling] is completely forbidden or there are quite different practices in this direction,” Lasha Khutsishvili said.
There will be a single limit for street or online games and people under the age of 25 will be banned from playing, he stated.
“ We have decided that the limit should be 25 years. We will listen to the arguments, but this is the decision that has been made at this stage, " the finance minister added.
According to the minister of finance, the changes will be designed in such a way that the amount of taxes paid to the state due to them will not be reduced because the taxation will increase, leaving budget revenues unchanged.
The new regulations include the prohibition of street and online gambling for citizens under 25, a ban on games for public officials, a ban on gambling for the economically vulnerable population. In total, 1 million citizens are banned from playing. According to the minister of finance, financial sanctions for violation of this rule will be provided to gambling providers.
The gambling taxation is changed in the sense that rather than normal corporate tax the gambling companies will be subject to a 10% GGR (gross gambling revenue – the difference between the revenues and sums disbursed as prizes) tax. According to the minister of finance, this change will increase their tax base by 65-70%.
Gambling advertising will be prohibited, which includes TV and outdoor advertisements. In the online space, the ban will apply only to Georgian
31 GEORGIA Country Report February 2022 www.intellinews.com