Gibraltar’s Justice, Trade and Industry Minister issued a warning today. The UK’s remote gambling tax increase will hit public revenue hard. Gibraltar maintains strong regulatory and economic connections with UK online gaming companies. Nigel Feetham confirmed Gibraltar joined UK gaming companies in lobbying efforts. They spent months trying to convince UK Treasury officials against these changes. Feetham released a statement about the UK Government’s remote gaming duty decision. He outlined potential damage to Gibraltar’s economy from these sharp increases.

Gibraltar became home to major online betting and gambling companies during the 1990s. Minister Feetham called the regulatory framework long-established, with dual regulation alongside UK systems. This sector generates 30% of Gibraltar’s GDP currently. It employs 3,400 people across the territory. Corporate taxes, local gambling duties and other expenditures contribute one-third of total tax revenue. Rachel Reeves announced remote gaming duty changes on 26 November. The rate jumps from 21% to 40% starting in April next year. Online betting tax rises from 15% to 25% beginning April 2027.

UK retail gambling taxes remain at current levels. Retail bingo duty gets abolished completely. Only online operators face these tax increases. Major online operators might pay 80-100% effective tax rates after April. Minister Feetham based this on modelled estimates, including all profit-related taxes. Gibraltar-licensed operators currently transfer £750m yearly to UK authorities. This happens through the UK’s point-of-consumption tax system already in place.

Gibraltar Faces Serious Consequences from Tax Changes

Feetham warned that higher UK taxes will slash corporate tax payments in Gibraltar. Employment numbers might drop if operators implement cost-cutting programs. These increases interfere with Gibraltar’s National Tax Strategy implementation. The territory recently started reforming its corporate tax measures systematically. The minister described months of meetings with UK officials. Gibraltar engaged ministers and parliamentarians extensively throughout this period. Gibraltar requested differentiated treatment during negotiations with the UK Treasury. They proposed lower, more manageable increases as an alternative solution. UK officials rejected both proposals during discussions.

The UK Treasury justified these measures as proportionate revenue generation. They aim to collect £1bn for public services funding. Officials cited perceived harm from online gambling as a reason. Gibraltar’s gaming industry contributed significantly to lobbying efforts. Advisory bodies joined the campaign against tax increases actively. Early warnings got dismissed before the tax increase scale became apparent. Some UK lawmakers approached this issue ideologically rather than economically. This created difficulties for Gibraltar’s influence attempts throughout the process.

The government now pursues various economic initiatives for diversification. Financial sector development ranks high among current priorities. Technology-focused regulation and non-UK gaming market expansion continue advancing. A new Gambling Bill will enter the legislative process soon. The Gambling Commissioner received instructions to accelerate diversification work immediately. Feetham delivered a stark final message about confidence erosion risks. Further damage could multiply current economic challenges significantly. Building economic strength took decades, but destruction happens much faster.