Lottery, favors in taxes

The Minister of Finances declared that the money lost in the cheap sale price of the license will be compensated through the high taxes against the winning company. But is the 10% tax high, and how much taxes does this activity pay in other countries?

The National Lottery of Austria, one of the two competitors that is running to receive the Albanian license closed the last year with an annual turnover of 2.9 billion EUR.

The Austrian government established two special taxes on the National Lottery, one of which is the “license fee” and the other “the betting fee”.

According to their official data, the Austrian Lottery paid last year 447 million EUR, or 15.4% of the annual turnover. Besides these taxes, the Austrian government has obliged the company to pay each year 3% of the annual turnover to support sport. Last year, the National Lottery of Austria paid an additional sum of 80 million EUR for this tax.

The total tax payment, according to the company, reach 527 million EUR, or 18.2% of the turnover. These are only the special lottery taxes, and do not include the other taxes paid by every business, such as VAT, Tax on Profit and contributes for the employees.

But how much would pay this company, with this turnover, if they were in Albania and with the Albanian government saying that they use higher taxes? First of all, the winning company in Albania will have no obligation for sport or culture. Their only obligations are two lottery related taxes, the 10% tax on annual turnover and the 0.5% tax on supervision.

If the turnover would be the same as in Austria, 2.9 billion EUR, the company would pay only 304 million EUR, which is 10.5% of the turnover, almost half of the taxes paid in Austria.

This comparison rejects the government’s claims that the winning company will have strong taxes. Besides selling the license with a symbolic price of 3.5 million EUR, the government will also grant them lower taxes.

These calculations are made without including the prizes that will be distributed to the lottery winners. In Austria, the company gives back to the winners 70 of the profit, and if you add taxes, their profit remains only 1.3%. In Albania, besides the low taxes and the almost given away license, the company will have no legal obligation about the prizes.

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