EDITORIAL | Will online gaming boost Meghalaya’s revenue?

Meghalaya taxation department recently decided that individuals who are into online gaming would have to get a license
EDITORIAL | Will online gaming boost Meghalaya’s revenue?
Representational Imagerummy game image from facebook

FROM THE EDITOR’S DESK

To increase revenue collection in the state, the Meghalaya taxation department recently decided that individuals who are into online gaming would have to get a license.

Power Minister James Sangma had stated that through information and technology, gaming has become one of the most popular trends.

Thus, the government felt it necessary to enact a law through the Meghalaya Regulation of Gaming Ordinance, 2021.

We can trace India’s online gaming industry back to the early 2000s.

Console and PC gaming had brought several middle-income group Indians onto digital gaming platforms.

In the mid-2000s, online gaming comprised primarily of social games.

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However, with cheap smartphones and even cheaper cellular data (one of the cheapest in the world), the online gaming market in India witnessed a boom.

Games like online rummy, poker and others have experienced exponential growth in the past few years as these games offer actual money.

Players are allowed to explore an alternative way of earning money and since money is involved, so is tax and the earnings a player gets from online games are subject to income tax.

Income earned from online gaming fall under section 115 BB of the Income Tax Act, which also comes under ‘Income from Other Sources’ while filing income tax returns.

Winnings from online gaming are taxed at 30 per cent. The net rate after cess amounts to 31.2 per cent.

Prize distributors would also have to deduct the tax before transferring it to the winner.

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Hence, it is an excellent way for the government to earn more revenue.

We have seen it here in Shillong. People have begun to spend more on online games that involve monetary transactions.

Right now, with the easy availability of smartphones and cheap cellular data, many have taken to online games irrespective of whether they are professional or part-time gamers.

With COVID-19 ruining several ways for the state government to earn, it is high time to look to other sources of revenue.

For instance, lotteries could permanently move over to the online platform.

Not only would this make it easier for one to take part, but it would also lower the overall expenditure of setting up such lotteries.

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