India plans to hit online mobile games with 28% tax
India's Goods and Services Tax (GST) Council has decided to apply a 28 percent tax on online gaming firms, treating them on par with gambling activities like horse racing and casinos. This move comes after the 50th meet of the GST Council in New Delhi.
Mobile gaming is expected to be the most affected by the tax as it is the dominant gaming platform in India, with hypercasual and social casino games being particularly popular and successful in terms of revenue. India witnessed a 32 percent increase in hypercasual game installs in 2022.
This is not the first anti-gaming action taken by India recently. Last month, the country's minister of state for electronics and information technology hinted at a potential prohibition of three types of mobile games.
The decision to impose a 28 percent tax does not differentiate between games of skill and games of chance, oversimplifying the matter and disregarding nuances like loot boxes.
Gaming industry experts and stakeholders are expressing concern about the impact of the tax. Esports communities are particularly affected, with members arguing that esports involve a significant element of skill, unlike purely chance-based activities. They believe the higher tax rate is not justified for the competitive gaming community.
The Indian mobile gaming market was projected to reach a valuation of $8.6 billion by the end of 2027, but the new tax levy may dampen the momentum of growth in the sector.
Source: Aaron Astle, Staff Writer at PocketGamer