MPL Forced to Cut 350 Jobs Due to Taxation Issues
According to an internal memo cited by Reuters on Tuesday, Mobile Premier League (MPL), a gaming platform, has announced its intention to lay off up to 350 employees due to the government’s tax imposition on online gaming companies. MPL stated that this measure was necessary for its survival.
In particular, the Indian government has imposed a heavy tax, which the gaming industry says it cannot sustain. MPL’s initiative to lay off a large part of its workforce is now being blamed on the tax.
Last month, the government decided to impose a 28 percent tax on the funds that online gaming companies collect from their customers for each bet.
However, the government had granted partial relief at the beginning of August and said that it would collect taxes from online gaming companies on the funds deposited to play online games and not on each bet.
A tax on bets placed on online games will be introduced from October 1, though several states are calling for a review, including Delhi and Goa.
The GST Council, chaired by the Union Finance Minister and representatives of all the states, had discussed the language of changes needed to enable the taxation of online gaming.
The purpose of the panel’s meeting in August was to consider the changes in tax legislation necessary for its implementation.
Union FM Nirmala Sitharaman said the Delhi Finance Minister opposed the online gaming tax, while Goa and Sikkim wanted a GGR (Gross Gaming Revenue) tax and not a face value.
However, Sitharaman said other states from Karnataka to Gujarat, Maharashtra and Uttar Pradesh wanted the decision taken in the last meeting to be implemented.
The payment will be revised after six months of its implementation, the FM had added.
