State lotteries and online gaming are likely to be permitted by the Andhra Pradesh Government as part of its plans to generate up to ₹13,100 crore through various additional taxes and cesses to boost its own tax revenue.

The proposals have already been circulated among the concerned departments by the Department of Finance, and Chief Minister N Chandrababu Naidu is likely to make a decision “very soon,’‘ a senior official told businessline

Legal opinion is also required on the proposed tax on lotteries and online gaming, as there is currently a ban on lotteries in Andhra Pradesh. “Multiple approaches are being explored to generate revenue from these segments,’‘ the official said.

Key proposals

The key proposals in the projected ₹13,000 crore additional tax revenue include a one per cent cess on State GST, aimed at generating ₹4,700 crore, VAT on liquor and other products like mobile phones to raise ₹1,300 crore, a tax on state lotteries to mop up ₹3,000 crore and an increase in entertainment tax, which could yield ₹2,300 crore. Some of these proposals, such as the hike in entertainment tax and additional VAT on liquor, have already been sent for legal scrutiny, the official said.

Once approved, the increase in entertainment tax would result in higher charges in cinemas, parks and other tourist attractions.

Increasing tax revenue is crucial for the State Government, given the need to develop infrastructure in the State to attract investments and to continue the mega welfare schemes being implemented in the State as part of the pre-poll promises under the Super Six Schemes. 

As per the budget estimates for 2025-26, total revenue receipts have been projected at ₹2,17,976 crore with an opening deficit of ₹67 crore. Of this, tax revenue and non-tax revenue were at ₹1,09,006 crore and ₹19,119 crore, respectively. 

The share of central taxes and grants in aid were at ₹57,566 crore and ₹32,284 crore, respectively.  If the new tax proposal is accepted, the tax revenue will go up substantially. 

Though there has been a view that new taxes are necessary for completion of new capital Amaravati, the State Government has recently clarified that the tax revenue would not be used for the project which would be taken up with loans from multi-national and national financial institutions.

With reference to online gaming, the matter is pending for Disposal before the Hon’ble High Court of Andhra Pradesh, Amaravati. The matter was adjourned to March 26, 2025.





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