Estonia to change rules for using gambling tax proceeds

TALLINN – A bill of legislative amendments has exited the Estonian Ministry of Finance that would make changes to the regulation concerning the use of proceeds from the gambling tax paid into the state budget. 

"In general, speaking of the state budget, we follow the principle that individual items of revenue and expenditure should not be dependent on one another, as revenue as a whole should be meant for the financing of expenditures. This increases flexibility in decision-making and reduces the risks associated with the economic environment," Minister of Justice Maris Lauri, standing in for the minister of finance, said in a press release.

According to the minister, the period of the coronavirus crisis showed that such distribution of money corresponding to the percentage of receipts does not work in situations where gambling tax revenue slumped dramatically.

Under the current Gambling Tax Act, fixed percentages of the gambling tax received go to the Cultural Endowment of Estonia and four ministries to finance specific areas set out in law. 

The government decided in April this year that for the years 2022-2025, the funds to be allocated to the ministries will remain at the level set out in the 2021 spring forecast and will not automatically change in the event of an increase or decrease in tax revenue. Gambling tax revenues will in the future be transferred to general state revenues.

The bill will not change the financing model of the Cultural Endowment of Estonia. According to the current law, the Cultural Endowment of Estonia receives 47.8 percent of the revenue from gambling tax paid into the budget.