Bethel: Govt not afraid of gaming court battle
The government will not be shaken by the gaming house operators’ intention to sue and is ready to fight in court, asserted Attorney General Carl Bethel yesterday.
“Mouth could say anything, and people could put anything on paper,” Bethel told reporters outside Cabinet.
“If they say they are going to sue, we will see. If they sue, they will be fought in court. If they go underground, they will be dug up.
“We have a whole arsenal of new powers under the Proceeds of Crime Act to deal with persons who decide that they want to break the law. So, we are not worried about whether they try to go underground, break the law or go to court.
“In any event, we will defend the inalienable right of the government to determine through Parliament who bears taxation and for what reasons and what is necessary in the interest of the fiscal health of the country, irrespective of persons.”
Attorney Wayne Munroe said on Monday he has been instructed by the The Bahamas Gaming Operators Association (BGOA) to take the government to court over its proposed sliding scale tax for the industry.
Attorney Alfred Sears wrote to Deputy Prime Minister and Minister of Finance Peter Turnquest on May 31 on behalf of the BGOA requesting a meeting to discuss the tax and warned that if he declined to respond in seven days the group would seek legal action.
That deadline was on Friday.
Asked about the BGOA’s threats to sue, Turnquest said yesterday, “The government of The Bahamas is sovereign, and it will not be bullied by the threats of any legal action.
“We will do what we think is right for the Bahamian people within the laws of The Bahamas.”
During the budget contribution, the government announced that gaming house activities will be taxed “through the introduction of a sliding scale of rates applied to taxable revenue”.
Gaming house revenues up to $20 million will be taxed at a rate of 20 percent; revenues between $20 million and $40 million will be taxed at a rate of 25 percent; revenues between $40 million and $60 million will be taxed at a rate of 30 percent; revenues between $60 million and $80 million will be taxed at a rate of 35 percent; revenues between $80 million and $100 million will be taxed at a rate of 40 percent; and revenues of more than $100 million will be taxed at 50 percent.
The government has also proposed taxing gaming patrons through a five percent stamp tax applied on deposits and any non-online games or digital sales.
Bethel said yesterday that the taxes to be imposed have been compared to other jurisdictions and are fair.
“Unfortunately, most of us don’t have the multimillions of the numbers boys to hire high-priced consultants to make a major pitch on social media, to be in the newspapers voicing our pain,” Bethel asserted.
“Well, their pain, in terms of paying taxes, it seems to me that they don’t even want to pay taxes that are established as benchmark levels in other countries.
“They want this special deal that they got cut in 2015. Well, those days are over.
“Our tax rates have been benchmarked against the standard rates of taxing of gaming in other jurisdictions; both in this region and internationally. You’ll notice that nothing they’ve said attacks that fact.
“They are just saying they don’t want to pay it, and they have the money, and evidently money, they believe, gives them status. They believe money gives them political clout; well, we’ll find out.
“There’s an old saying that ‘hog know where to rub’. They don’t rub on the nail, they rub on the smooth board.”
Gaming operators have noted that the jurisdictions that have been compared to The Bahamas have national lotteries, while The Bahamas does not.
To this, Bethel retorted, “And they also have income tax and corporate tax.
“They also have a host of other taxations that affects gaming operators that we do not have.
“So don’t argue about apple and oranges, because if you want to talk about the orange, I could say what affects the orange.
“We are talking about The Bahamas now, and the effective rate of taxation, never mind what form it takes; it’s on par with other jurisdictions.
“I compared it to the other jurisdictions in terms of the effective rate of taxation, not what the particular tax was here, [or] what the particular tax was there.
“They would wish to do that and focus only on those taxes that apply when it’s a national lottery.
“But my broader point is that the effective rate of taxation paid by gaming operators in other jurisdictions is no lower than what we propose in The Bahamas.”
The BGOA called the tax increases “unconstitutional, discriminatory, irrational and inequitable”.
The association has claimed that 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.
Speaking to these assertions, Bethel insisted that it is simply “emotional rhetoric”.
“This issue of racism is utterly untrue and utterly irrelevant,” Bethel said.
“What we have is a business that is essentially undertaxed.
“It has been undertaxed ever since they were liberated from the bonds of the criminal activities they were in and given some kind of legal status.
“They have always been undertaxed, and it’s time for them now to pay their fair share of taxation. That is plain and simple, and has nothing to do with race.
“My understanding is they have some ‘conchy joes’ who are also in the business.
“So how does this work? There are black Bahamians and there are white Bahamians who are in gaming, so where’s the racism?
“It has nothing to do with race; it has to do with business.
“It’s all about business; the business you are in and whether or not that business, in the view of the executive and the legislature, is undertaxed.
“They are undertaxed in our view.”