Casinos make a greater contribution to the Bahamian economy than Gaming Houses
NASSAU, BAHAMAS — Attorney General Carl Bethel yesterday defended the implementation of a gaming tax on winnings for only Bahamians, indicating that casinos, which are exclusive to tourists, make a far greater contribution to employment and economic activity throughout the Bahamian economy.
While presenting the Fiscal Strategy Report in the Senate on Wednesday, Minister of State for Finance Kwasi Thompson announced that starting January 1, 2021, the government will implement a long-planned gaming tax on winnings to help counter significant revenue losses.
However, the gaming tax on winnings will not apply to casinos.
Asked about the government’s reasoning for applying the tax to only Bahamian citizens, Bethel explained that compared to casinos, gaming Houses do not contribute as greatly to the Bahamian economy.
He noted that the taxing of casinos is “an economic module designed to effect a wider economic benefit to the overall economy, and the welfare of hundreds of thousands of Bahamians”.
Bethel said the country can benefit from the millions of tourists that casinos attract yearly, who pay Room Tax, VAT and go out and buy goods from Bahamian retail stores and the straw market.
“Their presence creates thousands of jobs for Bahamians in the tourism sector,” he said.
He added that the country also benefits from the VAT collected from the transactions between those tourists and stakeholders in the tourism industry.
“In short, the casinos make a far greater contribution to employment and economic activity throughout the Bahamian economy than Gaming Houses. This is why the taxation in casinos is where it is,” Bethel said.
The tax, which was introduced via the Gaming House Operator Amendment Regulations passed in the House of Assembly in 2019, was originally slated to roll out in 2020.
The new legislation introduced a sliding scale of taxes on gaming houses’ net taxable revenue and a five percent stamp tax on deposits.
The sliding scale of taxes, which was a source of great contention for the gaming operators, was agreed upon by stakeholders last year after months of failed negotiations.
The government increased the rate of tax on gaming revenues from 11 percent across the board to 15 percent on the first $24 million of gaming revenues, and then, 17.5 percent on all gaming revenues over $24 million.