Tuesday, June 10, 2014
By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
MAJOR casino operators are “vehemently opposed” to suggestions that Value-Added Tax (VAT) should be levied on players via the gross sum bet, fearing this could make them “less competitive” than North American rivals.
And, while rejecting the recommendation from the New Zealand VAT consultants in their May 6 report to the Government, casino operators told Tribune Business they wanted guest winnings to be ‘zero rated’ for VAT purposes.
The Government is proposing to grant ‘zero rated’ VAT status to export industries only, but the tourism and hotel industries have argued that they are, in effect, services industries and should receive the same treatment.
This would enable them, and hotel-based casinos, to both re-claim the VAT they pay on their inputs and avoid imposing the levy (now 7.5 per cent) on customers. This newspaper was told that the casinos do not want to be treated as VAT ‘exempt’, as originally proposed by the Government, because this would leave them unable to ‘net off’ their input tax payments.
“I’m just concerned that taxing customer winnings may make us less competitive with casinos in North America,” George Markantonis, Atlantis’s top executive, told Tribune Business.
Mr Markantonis said he was also “vehemently opposed” to VAT on casino revenues. “In the end that would penalise gaming customers, because we would have to pass it on. It could also hurt our competitiveness.”
Robert Sands, Baha Mar’s senior vice-president of government and external affairs, in an e-mailed response to Tribune Business, said: “Gaming tax is agreed under respective Heads of Agreements. It is paramount to preserve the gaming industry in the Bahamas, and that inputs are not exempt and that guest winnings are zero rated.”
The new Zealand consultant, Dr Don Brash and John Shewan, in their May 6 report to the Government, called on it to abandon plans to ‘exempt’ casino gambling and all other forms of gaming from VAT.
They argued that it was “difficult to justify” exempting gambling from VAT when the likes of food and essential services would be taxable, even if casinos were already subject to their own specific taxation.
Messrs Brash and Shewan added that levying VAT on gaming would also simplify reporting requirements for Atlantis, Baha Mar and Resorts World Bimini, as their different services would not be subject to different tax treatments.
“The draft Bill exempts games of chance, gambling and lotteries from VAT, presumably on the grounds that these activities are already subject to the gaming tax,” the New Zealand consultants said of the Bahamian legislation.
“New Zealand does not exempt gambling activities from VAT. Special provisions of the New Zealand Act deem supplies to be made for VAT purposes when amounts are paid to participate in gambling.
“The practical effect of these provisions is that VAT is imposed on the gross amount bet, less prizes paid out. VAT is payable in addition to casino duty and a problem gambling levy.
“The Mission suggests that the Bahamas give consideration to bringing gambling into the VAT.”
Comments
Well_mudda_take_sic says...
Perry Christie, as PM and Minister of Finance, no doubt will be overly happy to ensure the hotel casino operators are not subject to double taxation (i.e. gaming tax plus VAT) on their gross amount bet because doing so will allow him to argue that the illegal operations of the numbers' bosses should be similarly treated, notwithstanding the wishes of the Bahamian people as made known in the recent referendum instigated by him. Meanwhile, he is quite content to have the people of the Bahamas be double taxed with the current customs duties plus VAT. It is abundantly clear that Christie's undying loyalty is to the numbers' bosses and not the Bahamian people and that can only be for one obvious reason that does not need to be stated here.
Just yesterday, Eric Cantor (R-VA), House Majority Leader in the U.S. Congress, was defeated in a primary election in which there was a very low voter turnout. Consistent with the democratic processes to be respected, Mr. Cantor gracefully accepted the outcome of the election results. Under no circumstance would Mr. Cantor foolishly and arrogantly attempt to argue that his defeat in the election should be ignored because the voice of the electorate had not been heard as a result of the very low voter turnout. By contrast, Perry Christie has done just that with respect to the outcome of the web shop referendum that he himself instigated at great cost to our Public Treasury. Christie has defiantly ignored the voice of the Bahamian people as expressed in the referendum thereby utterly disrespecting our democratic processes; he has gravely violated the very rule of government that he, as PM, is sworn to uphold for all of the Bahamian people. Christie fails to recognise and accept that the referendum's outcome was determined by those who voted and not by the number of voters who chose not to cast a vote; our democratic processes allow for eligible voters to choose whether or not to exercise their constitutional right to vote and do not require a registered voter to vote. In other words, a low voter turnout does not determine the outcome of a duly held referendum in our constitutional democracy. Mr. Roker and many others of us are completely justified in calling for Christie's resignation and the resignation of all his cabinet members because Christie has, by disrespecting and ignoring the outcome of the referendum, effectively forfeited his right to govern the Bahamian people. Amazingly and very sadly, certain of the constitutional experts in our country (like Sean McWeeney) have chosen to remain silent on this most important matter. Christie no longer understands or appreciates that the rule of law and the will of the people are sacrosanct.
Posted 11 June 2014, 12:36 p.m. Suggest removal
Sickened says...
I too call for the resignation of Christie and his cabinet. A vote of no confidence is necessary before more damage can be done.
Posted 11 June 2014, 1:37 p.m. Suggest removal
BahamasGamingAssociation says...
https://www.facebook.com/pages/Bahamas-…
WHICH ON OF THE BELOW REIGNS SUPREME IN THE BAHAMAS?
The Bahamas Lottery and Gaming Act
Chapter 387
Section 50
Persons prohibited from Gaming
Or
The Constitution of the Commonwealth of the Bahamas
Chapter III – Protection of Fundamental Rights and Freedom of the Individual.
Section 26
Protection from Discrimination on grounds of Race, Place of Origin etc.
The Bahamas Gaming Association stands by the Ideology that all human beings who are 18 years or older should be treated equally in all sectors of the Bahamian Economy which is enshrined in the Constitution of the Commonwealth of the Bahamas.
Posted 30 June 2014, 11:50 a.m. Suggest removal
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