Over 100 online gaming companies in India have expressed concerns over the new tax system that will be imposed on these firms.
In a letter to the finance ministry, these companies claim that the new 28 percent tax on online gaming firms in India will negatively impact foreign direct investments in the sector.
The letter further noted that the new tax system will also put the $2.5 billion already invested in the sector at risk.
In the letter dated July 14, gaming companies in India also urged the finance ministry to rethink the move and added that it could create negative repercussions in jobs and investments in the sector.
It should be noted that top gaming companies Tiger Global and Peak XV, previously known as Sequoia Capital India have recently invested in Indian mobile gaming firms including Dream11 and Mobile Premier League.
Recently, in an exclusive interview with Reuters, Federal Revenue Secretary Sanjay Malhotra said that the new tax system will bring about positive impacts both socially and economically.
He further noted that several Indian ministers consider the bets on online gaming platforms a “social evil”.
Interestingly, during the last season of the Indian Premier League, revenues from fantasy leagues rose 24 percent annually to hit $342 million, according to Redseer consultancy.
The consultancy added that 2023’s edition of IPL witnessed over 61 million users participating, primarily driven by the less amount (Rs.8) required to play the game.