"Vijesti" journalist's response to the reaction of the Ministry of Finance: It is left to the croupiers to interpret the law

The Ministry claims that the tax on the winnings is calculated as a withholding tax, but it is not explained what the expenditure of the players of the games of chance is

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Clerks to calculate tax between two circles (illustration), Photo: Shutterstock.com
Clerks to calculate tax between two circles (illustration), Photo: Shutterstock.com
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

The Ministry of Finance in response to the text "Ministry of Finance: Profits to be taxed like other sources of income" continues its practice of not answering the questions of "Vijesti", and when the text is published they state in the first sentence that "the claims are not correct", and then in the very do not specify what is not correct in the response text.

On January 9, "Vijesti" published the article "Winnings at stake without tax due to impossible application, state without income for PIO". In which all three facts from the title are absolutely correct.

Winnings from games of chance, at least according to the law that was adopted in September, should have been collected from January 1, but this did not happen.

Organizers of games of chance, to whom this law imposes the role of the tax authorities to calculate and collect taxes from their players, said that they did not receive the necessary by-laws from the Ministry of Finance that would define what is a payment and what is a win and resolve a very large number of ambiguities from the written law. It is absolutely true that the Ministry did not prepare these by-laws, although it had four months from the adoption of the law to the beginning of its application to do so.

In response, the Ministry says that the taxation of winnings from games of chance is carried out by deduction, in the same way as for the taxation of other sources of income that are taxed according to the same principle in Montenegro, as well as that the taxation of winnings from games of chance by deduction is regulated by the Ordinance on the form, content, method of filling in and submitting the single report form on calculated and paid personal income tax and contributions for mandatory social security ("Official Gazette of Montenegro", 76/10...68/24).

However, this rulebook does not say anything about what are the winnings of games of chance and what is the basis of which form of games of chance. This is a regulation that assigns a code to various types of duties, so that as far as games of chance are concerned, it only says "088 - Winnings from games of chance" and nothing else.

The Personal Income Tax Act states that withholding tax is calculated on the "tax base, which represents the difference between realized income and expenses", while profit tax states that the base is "the amount of individual profit payment reduced by the amount of individual payment".

If, as the Ministry now claims, what is written about the withholding tax applies when calculating the tax on winnings, it means that it must be somehow defined what the expenditure of the players of the games of chance is for each form of the game, which has not been done. That dilemma cannot be left to be solved by a bookmaker or a croupier at a casino table.

If a player pays for several tickets and only wins on one, are all the payments his expenses or only the one where he wins, if the player plays for several hours in a casino or slot machine club and has more payments, what is his expense, if he gets a free "spin" whether it is a win for him or not, whether the croupier must first write tax returns to the players after each round of roulette, calculate the bases and collect the tax, and only then spin a new round,... All this and much more must be clarified. .

Now the exact same situation is happening as in 2014, when the same legal form of profit taxation was drawn up and it was supposed to come into effect on January 1, also the Ministry of Finance at that time (most of the employees of that department are the same as now) did not draft by-laws, the organizers refused to calculate the tax and it was deleted from the law a year later.

The Ministry also says that non-payment of this tax will not affect the compensation of losses due to the reduction of pension insurance contributions.

In last year's Fiscal Strategy 2024-2027. "a review of measures to compensate for lost income" is mentioned due to the reduction of contributions, which mentions the tax on winnings from games of chance, from which five million euros were expected.

Fines for organizers if they do not apply this law are up to 20 euros, with the possibility of losing the concession. Has anyone in the Ministry asked themselves why the organizers risk so much if the application of the law is possible.

"Vijesti" sent questions to the Ministry of Finance at the beginning of December, and again later, about all these and many other ambiguities in the application of this law. Despite more interest in the PR department of the Ministry, they did not receive any answers. The answers, without detailed explanations, arrived only yesterday, January 11, two days after the text was written stating that the law does not apply, and a month late.

Very frivolous from someone who should be the most serious department in the Government.

Goran Kapor, Journalist ND Vijesti

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