The new provisions for indirect taxes paid by game concessionaires will help support the Macau SAR Social Security Fund and attract more foreign gamblers into the city, Treasury Secretary Lei Wai Nong said today (Tuesday). ..
Ray commented in the legislative assembly before the final approval of the game law amendment this afternoon. Some lawmakers asked about the need for a mechanism that could reduce the indirect contributions of operators if they could bring non-Chinese players to a local casino. ..
Under the new amendments, game concessionaire indirect taxes have been effectively raised from 4% to 5%.
The Macau SAR government currently imposes an effective tax rate of 39% on total casino game revenue and 35% on direct government tax, with the rest imposed on many taxes to pay for various community and social purposes. I am.
To fund the Macau Foundation’s cultural, social, economic, educational, scientific, academic and philanthropic activities, authorities have levied a 1.6% tax on the concessionaire, with an additional 2.4% on cities and tourism. Collected for development and local social security. Fund.
This will increase the mentioned levies to 2% and 3%, respectively.
However, game operators can confirm that these two additional taxes will be reduced or exempted if they can prove that they have attracted gamblers to the SAR from other jurisdictions.
When asked by lawmakers about this issue, Secretary Ray said these changes were intended by the authorities to better face the “future challenges” facing the city’s economy under the current pandemic downturn. Pointed out.
“These percentages were defined with future needs in mind. […] In the past, the sources of visitors were not diversified, with mainland players 71% of the total, 19% from Hong Kong, 3% from Taiwan, and the rest from other parts of the world. ” He added.
“Since the central government defines Macau as the world center for international tourism and leisure, it is very important to expand the sources of information for foreign tourists.”
Ray also emphasized the importance of increasing public income that could be diverted to local social security funds.
“Since Macau has many workers and everyone knows that they are benefiting from this fund, there are many sources of information to support and maintain its sustainability for social security funds. There is, “Ray said.
Under local law, 3% of the balance of Macau SAR’s central budget implementation after each fiscal year must be allocated to social security funds.
Between 2013 and 2016, local governments injected 37 billion MOP (US $ 4.5 billion) into social security funds, Lei points out, and the fund’s reserves are now over 90 billion MOP.
Despite the answers, some lawmakers warned that local game revenues have already declined significantly since the pandemic, questioning the practical impact of this increase in indirect contributions.
In 2021, pensions alone reached MOP 5.5 billion in social security spending, while the fund received less than MOP 400 million.
Local governments have also repeated estimates of MOP 130 billion in total game revenue in 2022, expecting about MOP 45.5 billion in game tax, but with the progress of the pandemic, adjustments are already needed.
In the first four months of the year, game results fell 36% year-on-year to reach 20.4 billion MOP.
Direct game tax in the first quarter of this year decreased by 5% to about 8.7 billion MOP, and the total administrative revenue of Macau SAR decreased by 15.2% from the previous year to 22.3 billion MOP.
At the same time, government budget spending increased 11.7% between January and March to 20 billion mops, of which 11.3 billion mops were directed solely to “relocation, funding and subsidies,” including pandemic relief assistance. rice field.
