The local government has refused to specify in the new gaming law how much tax revenue from the gaming industry will be used for social welfare, the president of the Second Standing Committee of the Legislative Assembly, Chan Chak Mo, revealed yesterday in a press briefing after a meeting between lawmakers and representatives from the government.
According to Chan, the proposal was initiated by several lawmakers on the committee which is currently analyzing the new law in detail. They called on the government to clearly specify in the new law what percentage of the casinos’ taxes will be used for social welfare programs.
Chan reported that some members went even further, urging the government to raise the tax rate levied on casinos.
In response, the government explained that it has no intention of making any changes to the gaming tax rates, which are currently set at up to 5% of casino profits (in addition to the regular tax rate, amounting to 35%).
The government, according to Chan, noted that the two taxes account for almost 40% of casino profits and are the highest tax rates in force in any jurisdiction where casino activities are legal, remarking that there is no margin to increase these further.
The members of the executive also refused to link a fixed percentage of tax receipts to any specific budget item, saying that the government wants the discretionary power to allocate tax funds “according to the need.”
“Some members wanted more money dedicated to social welfare or a fixed percentage solely dedicated to this. But the government says it has no intention to do that, explaining that the law needs to be flexible. […] Nonetheless, the government can exercise this management of resources [funds] from the income pool, allotting more or less to social welfare [when] it is needed,” the president said.
The current law states that gaming concessionaires must make an annual contribution of up to 2% of gross income from gaming activities “in favor of a public foundation that aims to promote, develop and study cultural, social, economic, educational, scientific, academic and philanthropic activities,” as well as another “annual contribution of up to 3% of gross income for urban development, tourism promotion and social welfare.”
While the 2% contribution goes directly to the Macao Foundation fund, the 3% contributes to general revenue, and the executive wants both aspects unchanged in the new law.
Yesterday’s meeting was the tenth session of the committee that is analyzing the bill in detail, and the sixth with the government present. Another meeting is scheduled for tomorrow, with Chan aiming to have the law approved on its final reading before the expiration of the current gaming licenses — that is, by June 26.
On a previous occasion, commenting on the committee’s progress, Chan hinted that the review of the bill could be ready to table at the plenary by mid-April.
Committee skips detailed examination of junket provisions
During yesterday’s meeting of the Second Standing Committee, one of the items under discussion was Article 23, which regulates and defines the role of gaming promoters (also known as junket operators).
Although the article will be further discussed at tomorrow’s meeting, the committee president Chan Chak Mo hinted that the committee will not dedicate much more time to the matter, since there is another forthcoming piece of legislation which will specifically regulate junkets.
Nonetheless, provisions in the gaming law continue to enforce the rule that each concessionaire can only partner with one junket operator at any given time, and is responsible for all junket activities operating under their roof. It is stated clearly that VIP rooms and other junket-operated facilities cannot be on separate premises from those of the gaming concessionaire.
Last week Chan foreshadowed that the new law would be a simple in its provisions and should be passed before the end of the legislative year, which ends on August 15.
