Gaming houses facing sliding tax scale up to 50%
Gaming house operators are staring down increased taxation as of July 1, after government announced a sliding scale system in its 2018/2019 budget yesterday that could see those businesses lose as much as 50 percent of their revenue. The Bahamas Gaming Operators Association (BGOA) did not hesitate to respond, calling government’s move drastic, discriminatory and crippling.
As part of the government’s revenue generating measures designed to lead to a balancing of the country’s budget, Deputy Prime Minister and Minister of Finance Peter Turnquest announced in the House of Assembly yesterday that gaming house activities will be taxed “through the introduction of a sliding scale of rates applied to taxable revenue”.
Turnquest explained that gaming houses that make revenues up to $20 million will be taxed at a rate of 20 percent; those that make between $20 million and $40 million will be taxed at a rate of 25 percent; those that make between $40 million and $60 million at a rate of 30 percent; those making between $60 million and $80 million at a rate of 35 percent; those making between $80 million and $100 million at a rate of 40 percent; and the gaming houses bringing in more than $100 million at 50 percent.
Government collected $36.5 million in taxes from the gaming houses in the 2017/2018 budget period and expect to collect $70 million in the 2018/2019 budget year. The BGOA explained Tuesday that to date, “The local gaming industry already pays 11 percent or 25 percent of EBITDA (earnings before interest, tax, depreciation and amortization), whichever is greater, coupled with millions in fees for its locations, franchises, hiring of Bahamians and 7.5 percent in VAT (value-added tax) on all of its procurement of products and services, without being able to claim.”
Government has also proposed the taxing of gaming patrons through a five percent stamp tax applied on deposits and any non-online games or digital sales.
The gaming houses through the BGOA were forced to defend their position to not be burdened with more taxes on Tuesday, after statements made by an Organization for Responsible Governance (ORG) executive called on government to levy more taxes on the gaming houses to relieve the pressure on taxpayers.
But the BGOA members did not get their wish yesterday and their retort to the 2018/2019 budget was that they are “stunned and appalled” by the government’s move to increase their taxes.
“It represents a very unfortunate day in the Commonwealth of The Bahamas, to see a government blatantly discriminate against one industry versus another,” the BGOA press release stated.
“It is equally unfortunate to fathom the level of increase in taxes levied on the industry and now its patrons, which could only be aimed at crippling the domestic gaming industry.”
The BGOA claims the gaming houses are being targeted for racial reasons and said gaming house operators are being singled out because many of them are young, black and run efficient and profitable businesses.
“But what concerns us more, is that this is being done at a time when, as far as any honest observer can see, the same level of scrutiny and examination was not done to other industries that are not predominantly black owned,” the BGOA pointed out.
“It’s one thing to worry that your government can wake up on Monday morning and say I want to arbitrarily raise your taxes without a single thought to how that will impact the substantiality of your business. It’s totally another thing to expect that this will be done because you do not belong to a certain political or social class, or that you have the wrong color of skin.”
Shadow Minister of Finance for the Progressive Liberal Party Chester Cooper said yesterday that family island residents still depend on gaming houses in lieu of banks.
“The banking system has failed Bahamians,” he said.
“The people in remote communities like South Andros and Acklins and Black Point have to depend on deposits in gaming houses to be able to get their money. Now it is going to cost them five percent to put their own money on deposit. This is tax madness. It is unconscionable.”
The BGOA called the government’s move “economic oppression”.
- Two web shops file lawsuit against AG, prime minister - May 28, 2020
- Govt accelerating move to digitalpayment systems - May 28, 2020
- DPM on budget: Govt will not sugarcoat economic troubles - May 27, 2020