Macau Govt Plans Raised Tax Revenue In 2020

The Macau government now plans to raise approximately MOP49.98 billion (US$ 6.26 billion) in taxes from the city’s gaming industry this year, according to a updated financial-year 2020 estimate. Such projection includes MOP45.50 billion in direct tax on the city’s casino gross gaming revenue (GGR), half of what the government initially predicted in November last year, according to the Financial Services Bureau’s published paper.

Because of the negative impact of the Covid-19 pandemic on the local economy, especially the gaming industry, the Macau authorities halved their forecast for the City’s GGR casino in full year 2020 to MOP130 billion.

The government taxes Macau’s GGR casinos at a rate of 35% but other casino gaming gross levies increase the tax rate to 39% in turn. Certain taxes on the Macau gambling industry include income levies on conventional Chinese lotteries, on horse racing and instant lotteries, and taxes on profits received by gambling junket operators.

The government said it now expects to raise MOP210 million in taxes on commissions paid to junket operators in its revised budget for 2020, down 41.7% from its original estimate. Casino operators’ contributions to special initiatives – including donations to urban development programmes , social security programme, and to help the city’s tourism industry – are now projected to hit MOP2.60 billion, down 50.0 %from November’s estimate.

During the first three months of this year the Macau government received just over MOP18.48 billion in tax revenue from the gaming industry in the region. Compared to the previous year, the figure was down 37.6%, official data released in late April revealed.

For a variety of factors, the tax-taking estimates in a given calendar cycle and the GGR casino in the town in such a time frame are not directly comparable. These include the fact that usually there is a gap between the point at which GGR is registered in casino operations in Macau, and the point at which the Macau government records tax as having been paid on such activity.

In a recent study, Fitch Ratings Inc. reported that it expected Macau to experience a “much deeper” economic downturn in 2020 compared to other ‘AA’ peers “whose economies are less dependent on tourism.”