The Macau government fiscal surplus went up 15.3 percent year-on-year in the first half of 2017 to MOP20.08 billion (US$2.50 billion) as public revenue – which mainly relies on direct taxes from gaming – kept rising.
The government’s total revenue stood at approximately MOP54.83 billion at the end of June, 14.2 percent higher than in the prior-year period, according to data disclosed by the city’s Financial Services Bureau.
Direct taxes from gaming brought in 82.5 percent of the Macau government’s total revenue in the six months to June 30. The government collected nearly MOP45.23 billion in direct taxes from gaming in the first half of 2017, up 14.2 percent year-on-year.
Macau levies an effective tax rate of 39 percent on casino gross gaming revenue (GGR) – 35 percent in direct government tax, and the remainder in a number of levies to pay for a range of community good causes.
Accumulated direct tax revenue from gaming has been rising as casino GGR in Macau continues to grow. Aggregate GGR for the first six months of 2017 stood 17.2 percent higher than in the same period in 2016, at about MOP126.38 billion, according to official data.
Japanese brokerage Nomura said earlier this month that it was lifting its growth estimates for 2017 Macau casino GGR, from 12 percent to 15 percent, after the market posted “solid second quarter” results.
Government expenditure also increased in the first six months of 2017. Public spending reached MOP34.75 billion, up 13.6 percent year-on-year, the official data show.
The government’s surplus is currently more than three times above the MOP5.57-billion forecast for full-year 2017. The execution rate on budgeted spending stood at 40.7 percent in the first half, according to finance bureau data.
Fitch Ratings Inc said in February this year it expected Macau’s gross domestic product to grow by 2.5 percent in 2017 “supported by improving gaming revenues from new casino openings”.
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"Competition is tough in Macau and is also changing. It [the local market] is susceptible to a lot of macro factors”
Daisy Ho Chiu Fung
Chairman of casino operator SJM Holdings Ltd