Boosting betting tax in the budget would raise up to an extra €53 million a year for the State, according to Department of Finance officials.
The tax take from betting almost doubled to €95 million in 2019 from €52 million the previous year, after the Government increased the rate on all bets placed in the State to 2 per cent from 1 per cent.
Increasing the rate by one percentage point would add a further €53 million a year, while adding half a percentage point would yield another €26.5 million, the department’s Tax Strategy Group (TSG) report states.
Government would collect a further €800,000 if it increased the tax on the commission earned by betting exchanges, which allow customers to bet against each other, to 30 per cent from 25 per cent, the report added.
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But it cautions that those estimates depend on “the betting market continuing as normal in 2025 and 2026″ with neither bookies nor their customers changing their behaviour.
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“It is understood the burden of such additional tax increases would mainly impact large bookmaking firms,” it said.
Along with the increase in 2019, the Government introduced relief of €50,000, meant to ease the burden on small independent operators, whose share of the market has shrunk rapidly in recent years.
The report suggests increasing this relief to €65,000 should the Government decide to boost the tax rate.
However, it adds that Revenue officials argue that this would benefit only a handful of businesses, while it would add to the challenge of getting EU state aid approval for such a move.
The report notes that three big businesses dominate the market. Although it does not name them, they are Irish-based giant, Flutter Entertainment, mostly through its subsidiary Paddy Power, Boylesports and UK-based Ladbrokes.
A Health Research Report found in 2022 that problem gambling had fallen over the previous eight years, but still hit more than 135,000 lives in the Republic.
Revenue figures show that betting is growing, but moving increasingly online. In 2019, customers wagered €28.9 million in cash and €23.5 million digitally, including €1.8 million with betting exchanges.
In 2023, digital’s share was more than €55 million, of a €102.7 million total, while punters bet €46.6 million in cash.
Separately, a one percentage point increase in the higher rates of Vehicle Registration Tax (VRT) is one of the budget options outlined by the TSG papers.
It says that if applied across the upper VRT bands – 11 to 20 – covering the price of new and imported used cars, it “would affect only cars with above-average emissions” and could raise €28 million based on 2024 registrations.
The group also suggests increasing the NOx surcharge on new and imported cars by €5 per mg/km, potentially generating another €15.5 million.
On Benefit-in-Kind tax (BIK), the paper proposes creating a new zero-emissions category, with rates ranging between 6 and 15 per cent, depending on annual business mileage.
A higher VRT rate of 15 per cent is also suggested for vans and light commercial vehicles emitting more than 260g/km of CO2. This would sit above the recently introduced two-band emissions-based VRT system, where the top rate currently stands at 13.3 per cent for vehicles over 120g/km.
The TSG notes that future reforms could include emissions-based BIK rates for vans, potentially retaining the current 8 per cent rate for low-emission models, with higher rates for those over a certain CO2 threshold.
The latest TSG paper revises a proposal made last year on an additional VRT surcharge based on a vehicle’s weight.
Modelled on a system currently operated in France and Norway, an additional charge would be imposed on vehicles above a certain weight threshold, with various potential reliefs for the likes of fully electric or hybrid models.
The TSG states: “It is well documented that the scale of the proposed electrification of the national fleet will entail significant revenue risk, with the growth in EVs expected to erode Exchequer receipts from motor tax, VRT, VAT and fuel excise, particularly if the current tax structures remain unchanged.”
It estimates that revenue from taxes on fossil fuel use and related transport will fall by €1 billion by 2030, down from €5.3 billion in 2022.
