NEWS > ANALYSIS
COMMITTEE HEARINGS DIMINISH POINT OF CONSUMPTION CASE
>>
With the threat of a point of
consumption tax being introduced in December 2014, tensions are rising between those that stand to gain and those that stand to lose the most if the measures are implemented. Tom Victor examines the fallout of the latest round of government DCMS Select Committee meetings
A
t one of February’s Department for Culture, Media and Sport committee Pre-Legislative Scrutiny of the Draft Gambling (Licensing & Advertising) Bill meetings, committee chairman John Whittingdale MP asked whether the proposed point of consumption tax held water as a means of tackling tax avoidance alone. Comparisons had earlier been raised between offshore gaming operators and the likes of Starbucks and Amazon; however, the inability of Gambling Commission CEO Jenny Williams or DCMS permanent secretary Jonathan Stephens to answer Whittingdale’s question suggests there are many more barriers to cross if the government’s self-imposed deadline of a December 2014 POCT introduction will be met. There remains industry, and arguably DCMS committee scepticism about the tax changes, announced alongside regulatory proposals to ensure all UK-facing operators require a licence from the Gambling Commission, but de?ned by
15%
Proposed point of consumption tax which would be imposed under draft UK regulations in December 2014
Stephens as: “Two elements which are clearly in parallel but neither is dependent on the other and each stands on its own merits.” Analyst Ivor Jones of Numis Securities remains convinced that the tax proposals, as they currently stand, will not come to pass, arguing that following the most recent meeting, “we came away a little more con?dent we are right”. The possibility of a point of consumption taxation system has loomed larger in recent years as a growing number of traditionally UK-based and UK-facing operators, both public and private, have opted to leave these shores. Betfair and Gala Coral are among the more recent eGR Power 50 members to go down that route, leaving bet365 as an increasingly isolated voice when it comes to British ?rms maintaining the vast majority of their operations and egaming jobs in Britain. The latter point is just one of the arguments for keeping a tighter rein on the industry but also one which might provide greater cause for concern in the light of the Isle of Man government seeking to develop
24
www.egrmagazine.com