(Podgorica, 5 July 2013) – The reluctance of the tax administration to secure the full implementation of a recently adopted law taxing gambling activities, demonstrates the degree to which Montenegro’s gambling lobby remains above the law. There is no political will for the law to be implemented towards all equally.
Not even after two weeks since the new law was adopted, gambling firms “weren’t capable” of adapting their operations in accordance with the law. The only locations where the law isn’t being implemented are betting houses, casinos and other sites where gambling takes place. This leaves open the question of why the state is tolerating such behaviour and why it lacks an interest in placing the gambling industry fully within legal parameters.
Furthermore, in order to avoid the legal obligation of paying taxes, some gambling operators have been involved in recent days in speculating on the alleged dissonance between the VAT Law and the directives of the EU.
Of course, Montenegro’s gambling lobby has chosen to only ‘take’ from the EU directive portions that benefit them, thereby ignoring Article 401 of EU Directive 2006/112/EC, which clearly states that the “Directive does not prevent member states from introducing taxes on betting and gambling…”
Even Article 135 of the Directive, which gambling operators are citing using faulty translations, clearly states that “betting, gambling and lotteries” are excluded since they can be “subject to the conditions and restrictions imposed by every member state individually.” This confirms that Montenegro had the right to independently decide to impose an obligation on gambling operators to pay VAT taxes.
A much bigger problem for the gambling industry, however, is the introduction of a higher order and more transparency into the revenues it generates than has been the case in the past. Uncontrolled gambling activities are an important ground for money laundering, meaning that every addition control is welcomed in order to ensure that violations of the law and criminal activities are identified.
When we consider that certain forms of gambling, such as the lottery in Montenegro, are monopolized by ‘controversial businessmen’ like Brano Micunovic, it is absolutely necessary to increase oversight over their activities. This should include precise information on revenues and how these firms fulfil their obligations to the state. The current level of oversight over the gambling industry was virtually non-existent, while the evidence of revenues was largely based on the industry’s goodwill.
In that sense, it is unacceptable that the controls of the Tax Administration are still avoiding betting and gambling houses, thus allowing them to violate the law unpunished. We believe that the gambling lobby, even if it is presided over by Micunovic, should not be above the law and that the obligation to pay VAT taxes should be the same for everyone and in accordance with the law.
