Increase in taxation
I find it truly amazing that the government of The Bahamas is boasting that it just increased taxes by a whopping 127 percent on a sector of the economy that is owned 100 percent by Bahamians, namely the web shop gaming industry. Indeed, every advanced economy and developing countries have been reducing taxes on their companies and their citizens for the past few years to stimulate economic growth, development and employment. However, The Bahamas has proven to be an exception to this trend. Not even President Donald Trump would be so foolish to have imposed according to our Bahamian government a 127 percent tax increase on any sector or industry of the American economy.
Let’s take a closer examination at this devastating tax increase on the soon-to-be no growth web shop industry. On January 1, 2015, the web shop gaming industry became legal, regulated and taxed notwithstanding the strong opposition of the Free National Movement and the Christian Council. The original rate of taxation was 11 percent imposed on all web shops across the board. At this rate the government of The Bahamas earned some $21 million in tax revenue from the web shops per year. The government now has a two-tier tax structure on the web shops, a 15 percent tax rate which is a rate increase of 36.36 percent on web shops with revenue of less than $24 million per annum and 17.5 percent for those web shops with revenue greater than $24 million. This is a rate increase of 59.09 percent on their tax bill.
Additionally, the web shops are still legally obligated to make donations to charities and other worthy causes. In contrast, the foreign-owned casinos will see no tax increase and will still be granted tax concessions. The Bahamian government admitted that it is seeking to increase the revenue gained from the sector by 66.67 percent, or $14 million per year. According to the results of the Bahamas government studies into the vulnerabilities of the web shops gaming industry to money laundering, it was revealed that the average Bahamian gambler had $5 on their gaming accounts and most gaming transactions were for less than $60. In other words, the web shops could not be used for money laundering purposes.
Beginning April 1, 2019, the Bahamian government for the first time will tax gaming winners of the local web shops. This same government that acknowledged that it is mainly poor Bahamians who are gambling will extract some five percent tax on winnings under $1,000 and 7.5 percent on winnings above $1,000. This amounts to a taxation rate of some 500 to 750 percent increase on winners. The government claims that this winning tax will generate some $15 million in tax revenue. It seems that this present government administration has an insatiable appetite for increasing taxes on poor people as this new tax on winnings follows its unconscionable 60 percent VAT rate increase.
Thank you editor for affording me the opportunity to express my written views on this subject matter.
– Kevin Mckenzie