Online Gaming Taxation Is A Need Of The Hour

Online Gaming Taxation Is A Need Of The Hour

Can a nation’s future be impacted if a generation’s attention is manipulated? There is no longer an element of hypotheticals to these questions. Dopamine addiction can capture and influence a generation’s attention. Policymakers in India need to ask themselves these questions. 

Taxing online gaming should start with asking these questions to the GST Council. The intentions of its youth determine a country’s destiny. Can online platforms capture the attention of India’s youth? How much time do students spend being productive these days? Do they play sports or work out to reduce stress, or do they play online games instead? 

This irony is that these online games make them more engaging by incorporating artificial intelligence into their design to make users spend more time on them. This promotes anxiety and depression and a loss of a generation, not a loss of productivity.

The gaming lobby controls policy making instead of tackling the critical issue of how online games captivate a generation. There has never been a regulation on online gaming that seems so casual and lighthearted as the regulations issued on April 6. Yet there is still a way to prevent addiction in the young generation. 

By charging the highest GST slab, addicting apps can be contained. Furthermore, GST surcharges should be based on how long users spend on platforms. If 5 per cent of users spend more than two hours a week or more than 30 minutes a day on the platform, they should be charged a 20-30 per cent surcharge.

The platform would then be forced to lower its addiction algorithms to manipulate players’ minds to keep them playing. Furthermore, it would prevent users from staying on an app longer than the allotted time for a day and week; they would automatically log out after exceeding the limit. 

An artificial distinction has been made between games of skill and chance by the online gaming lobby, and the two are taxed differently. Substance abuse industries argue that heroin should be taxed less than fentanyl because it is less addictive.

For gaming platforms to be successful, policymakers must understand that their goal is to keep their users engaged as long as possible. Users will spend more money on the game paraphernalia to change or improve performance the longer they can catch their attention. 

It is estimated that the total price of tickets to Hollywood exceeds billions of dollars for purchase inside online games. Online games’ basic revenue model cannot be achieved unless the user is addicted to the point where they will pay money for virtual items. Games become addictive when a person cannot live without the dopamine kick the game provides.

As a result, the user spends more than just time on the game but also money. In this way, a generation loses productive minds – they create productive assets instead of spending time and intention on online games. In an internet gaming world where dopamine flows freely, a generation of dopamine-fueled gamers is lost in a meta crisis. 

While social media was being built, policymakers lacked regulatory control; now, they’re giving it to self-regulating gaming organizations. The situation cannot get worse than this, nor can policymakers genuinely believe that an industry built upon addiction will regulate itself.

Does the sale and purchase of opioids need to be regulated by drug makers? Is it appropriate to let cocaine cartels hold themselves? Is Chitta selling in Punjab a legitimate industry that should be protected by police, and can they self-regulate? 

Narendra Modi discussed PUBG addiction in his radio broadcast, ‘Mann Ki Baat.’ With MKB’s 100th episode approaching, it’s time the PM talked to parents about these online games and their addictive power. We need to explain in simple terms the impact of this manipulation of minds. Policymakers need to address addiction intrinsically linked to these platforms in addition to taxation. 

When a nation is snared into a game controlled, managed, and owned by an enemy state, its attention can even be weaponized. Policymakers must monitor these organizations to ensure their ownership is straightforward and honest. 

Regulatory self-regulation cannot be left to organization that generate income from membership fees. To control this addiction among youth, taxation must be linked to the time users spend on it.

Taxing The Time Spent

New approaches to policy development take time to evolve since the old frameworks don’t work in emerging fields. For an example, online gaming regulations were updated on April 6 2023. Despite global phenomena threatening to hollow out generations of minds, policymakers stick to outdated playbooks. 

A whole generation of citizens could be affected by these games’ inattention and mental disorders due to this policy. Games of chance and skill are not readily distinguishable, as the draft does. To regulate a sector, policymakers use a tried-and-true model of self-regulation.

In this regard, the amendment approved by the government on April 6 2023, dedicates nearly seven pages to SROs (Self Regulating Organizations). Only through introducing a tax based on the amount of time spent on the platforms can we control the addictions to these platforms. Technology companies that own online platforms should be taxed if users spend too much time there. 

Company taxes should be imposed on companies, not users. The tax could be calculated by setting a minimum engagement time, such as 30 minutes a day or 3 hours per week, that will not be considered harmful behaviour. Several incentives should be provided to companies to encourage their behaviour and data collection strategies to promote engagement while discouraging compulsive use. 

Published by : Aliya Khan.