Gambling taxation has been a pesky issue, not only because regulation is still quite contentious and getting to actually play somewhere is quite the challenge. Au contraire, it has to do with gamers’ unwillingness to pay tax on what they have earned.
Looking at Japan’s Gambling Taxation Skivers
A recent survey conducted by Japan’s Board of Audit has revealed rather telling figures. Out of the surveyed gamers, a mere 5{44b09f69e02b4a9880bf6e3f987d2afd285263f93639dabf176d3ae6ad2c79c6} of the individuals having earned over $93,000 in 2015 had reported their earnings truthfully to the tax authorities. In other words, there was a lot of skiving and hiding of proceedings.
Meanwhile, Japan’s Board of Audit commented that those individuals may not necessarily have acted out of ill will. Many gamblers are unsure how to actually report their proceedings and they prefer not to tangle with authorities if they can avoid it.
Avoidance, as it turns out, is a matter of choice. However, without clear-cut taxation rules for their proceedings, many individuals who turn a profit on gambling activities are understandably reluctant to approach the tax office with their requests.
Out of the 531 cases surveyed by the Board of Audit, only 27 turned out to be conscientious tax payers. However, many of those that were found in the wrong declared their taxes wrongly, either hiding income or failing to declare it on time.
Even then, the regulations relating to taxing gambling revenue in Japan are not so worrying that it can justify tax avoidance on such a scale.
Dealing with Incomes in Japan
Gamblers may face a lot of legal hurdles and have difficulty finding venues to play, but the truth is that any winnings below $4,300 are considered occasional income, which makes it easy for recreational gamers to enjoy a beloved hobby while turning a bit of a profit on top.
Japan is also quite accommodating when it comes to dealing with the specific challenges that gamblers face. For instance, your losses as a gamble in Japan would be deducted from the amount total, for example.
And yet, the findings of Japan’s Board of Audit are disconcerting enough to at least hint that gamers won’t pay sufficient attention to getting their taxes in compliance with the law.
One of the biggest breaks for gamers in Japan is that they are not allowed to verify their identities when they indulge in gambling activities. However, this has a markedly pernicious effect whereby such tax discrepancies occur.
Pushing the Stakes Up
With the now voted legislation allowing the creation of casino resorts in Japan, it’s likely for the country to seek a tougher stance on any tax evaders. Even Japanese companies are excited at the prospect of growing the industry at home. An appeal has already been launched by many businesses operating in the sector to the Japanese Ministry of Finance asking for a framework obliging such institutions to obtain the necessary information.
As the limelight shines on Japan, the country will have to step up its legal game and make sure that local residents are in fact honouring their tax responsibilities. Back in June, there was a debate as how to properly tax gambling winnings.