MACAU BUSINESS


policies like stricter rules on auditing and accounting. “Lower VIP gaming tax could be beneficial to


[junkets] business but whether the government will do so is another matter,” the figure said. “It seems the direction of Macau policies now is to reduce the reliance upon junkets.”


Fiscal coffers Following the inauguration of the new term of


government in 2014, the city placed emphasis on the growing Chinese middle-class and family visitors than high rollers whilst facilitating ‘the healthy development’ of the junket sector with stricter rules. In response to the talk of changes in gaming


taxation the Macau gaming regulator said that there were no plans at the moment concerning the levy regime but that the authorities remain open to any suggestions.


Speaking on a public occasion in January,


Secretary for Economy and Finance Lionel Leong Vai Tac added that the administration was actively planning for the future development of the gaming industry in view of the regional competition. But he stressed lowering tax was “not the only means” of enhancing the competitiveness of local casinos, with the quality of services, variety of products and marketing also important. A public consensus should be reached before any


changes in tax, stressed Billy Song Wai Kit, president of the Macau Responsible Gaming Association, as the direct gaming tax is the largest source of fiscal income of the Administration. “If the tax is lowered the city in the long run has to


have higher casino takings to maintain the current level of fiscal revenue,” he cautioned. “This is simply a different direction from the economic diversification [from the gaming industry] the government is now working on.” Direct taxes from gaming amounted to an average


81.42 per cent of the city’s annual fiscal revenue in the 2011-2015 period, figures from the Financial Services Bureau reveal. But the share has slightly declined in recent years amid the economic diversification reorientation: In the first 11 months of 2016, direct gaming tax totalled MOP72.76 billion, representing 77.7 per cent of total government revenue.


STATESIDE n AFRICA n G2E ASIA REVIEW n IGAMING June 2017 Sensitive topic


As Macau-based lawyer André Santos Raquel, who focuses on gaming and banking, suggests, lowering the tax is only possible when the city is less gaming-reliant. He wrote in the Asian Gaming Lawyer magazine in 2015 that the Administration had to take “decisive steps to ensure the long sought diversification of the local economy, rendering the Macau budget less dependent” on gaming tax. Davis Fong Ka Chio, Director of the Institute for the Study of Commercial Gaming at the University of Macau, said the gaming tax regime is a “sensitive topic” requiring the engagement of the industry and the public in discussion, while the government had to study the matter in a holistic approach in consideration of all factors. “The views of whether the gaming tax is high or


low vary across different stakeholders,” he recently remarked. “[But] the current tax rate currently does not impose huge operating pressures upon the gaming operators…as they’re not losing any money at the moment.” In addition to gaming taxes, the government now


exempts the city’s gaming operators from paying a 12 per cent complementary tax on profits generated by gaming operations. The companies still have to pay the complementary tax for profits generated by the non-gaming segment. Leong Sun Iok, president of Macau Gaming Industry Employees Home, an affiliate of the prominent Macau Federation of Trade Unions, suggests authorities exempt such tax in the post-2020 period only once the gaming companies fulfil their social responsibilities, namely ensuring the welfare of their workers. Although the expiry deadline of the gaming


licences is approaching, no concrete plans have been announced with regard to the matter other than the mid-term review. Leong Vai Tac, the city’s top financial official, reassured in January that the government would make decisions before 2020. “We continue to welcome any suggestions


proposed by the media and the community concerning the gaming industry,” he concluded.


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