Tax Matters | Updating the Macanese Tax Legislation

Paulo Cordeiro de Sousa*

Generally speaking, the Macanese tax legislation is out of date. It is somewhat understandable that the Government does not feel the need to update the existing tax statutes, since Macau depends mainly on the gaming industry and, as mentioned in the budget for the year 2019, it is expected that 80.5% of the total revenue of the Macau SAR will come from this single industry, mainly from the gaming tax, which is 35% of the gross revenue of the concessionaries from gaming operations. Nevertheless, it would be helpful to all individuals and entities that are subject to taxes in Macau, or for those who are planning to make investments in Macau, to have clear, understandable, up-to-date legislation in force.
Apart from the gaming tax, the taxes that are currently in force in the Macau SAR are the following:
Professional Tax (i.e. the Personal Income Tax), which is levied on income derived from dependent or independent work sources;
Complementary Income Tax (i.e. the Corporate Income Tax), which is levied on the profits, or deemed profits, derived from an entrepreneurial activity;
Industrial Tax, which is an annual fixed payment that entities that perform commercial or industrial activities are required to make – the yearly Macau SAR budget has, up to this date, exempted taxpayers from payment of this tax;
Urban Property Tax, which is levied on the rental income or on a deemed income from immovable properties;
Stamp Duty, which now also includes the Special Stamp Duty on the re-transfer of some real estate property within a period of two years counting from the date of purchase (Law 6/2011), and the aggravated Stamp Duty on the purchase of the second or further residential property;
Tourism Tax, which is borne by the customers of restaurants, hotels, saunas, and similar establishments – the yearly Macau SAR budget has, up to this date, exempted taxpayers from the payment of this tax;
Motor Vehicle Tax, which is levied on new imported motor vehicles; and
Vehicles License Tax, which is the annual tax that on-road motor vehicles must pay.
Tax law is a branch of the public law, which in other countries is currently usually treated separately from the administrative law. In Macau, it is still subject to the administrative statutes and to the administrative court. There are no statutes specifying the principles applicable to the tax sector. There is no specialised tax court; the courts apply a Tax Enforcement Code that was revoked and is no longer in force (as I have referred in a previous article). In my view, it is very important to incorporate in a generally applicable tax law some principles that are commonly recognised in other countries, such as the principle of non-retroactivity of tax laws that increase taxation (although one could always argue that the retroactivity of a tax law would be a violation of private property, therefore a violation of Article 6 of the Basic Law), or the principle of equal treatment.
Is it not time to update the current tax statutes and create new tax legislation addressing the above-mentioned matters?