Macau’s casino gross gaming revenue (GGR) for 2021 might only reach MOP130 billion (US$16.28 billion), i.e., 44.5 percent of 2019′s MOP292.5 billion, as “harsh” economic conditions are likely to persist, and recovery from the Covid-19 pandemic will “take time”, says the city’s government in its budget proposal for the fiscal year 2021.
The city’s budget proposals are typically conservative when forecasting the community’s aggregate take from gambling operations in the following 12 months.
The 2021 fiscal budget would – like retrospectively that of 2020 – be “in the red”, as it would be “hard to diminish within a short term”, the effects wrought on the local economy by the pandemic.
According to the 2021 budget plan – to be debated soon in the city’s Legislative Assembly – Macau’s take from gaming tax proper – levied at 35 percent of gross gaming revenue (GGR) – is expected to reach MOP45.5 billion for the fiscal year 2021. Other charges levied on GGR take the effective local tax rate on gaming to nearly 40 percent, although the difference is not reflected in the city’s actual fiscal budget.
The Macau government highlighted in its 2021 budget proposal, that the city faced risk of “structural fiscal deficit”, as Macau had a “narrow tax base” and “increasing expenses but no rise in income”.
The authorities nonetheless recommend maintaining several allowances for Macau ID holders for the fiscal year 2021, as well as various tax waivers. The budget proposal said the city needed to draw MOP26.58 billion from its fiscal reserve, in order to “sustain a fiscal balance”.
Macau’s fiscal revenue has been hugely reliant on gaming tax. The Macau government collected just above MOP23.41 billion in tax from the city’s gaming industry in the nine months to September, which made up nearly 70 percent of the MOP33.51-billion tax revenue the government collected from all sources.
The government taxes the GGR of Macau casinos at a rate of 35 percent, but other levies on casino gaming gross raise the tax rate to 39 percent in effect. Other taxes on the Macau gambling sector include levies on the income of Chinese traditional lotteries, horse racing and instant lotteries. There is also a tax on commissions earned by promoters of VIP gambling junkets serving the city’s casinos.
Apr 12, 2021Banking group Morgan Stanley expects Macau casino industry earnings before interest, taxation, depreciation and amortisation (EBITDA) to have fallen sequentially in the first quarter, despite an...
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Total number of gaming tables to be in operation at the expanded Jeju Lotte Tour Casino in South Korea