The Macau government’s take from direct taxes on gaming dropped 34.5 percent in full year 2015, show provisional data disclosed on Friday by the city’s Financial Services Bureau.
The city collected MOP84.4 billion (US$10.6 billion) in fiscal revenues from direct taxes on gaming between January and December last year. That compares with MOP128.9 billion collected in 2014, an all-time record. The 2015 take was the smallest since 2010.
Direct taxes from gaming brought in 76.9 percent of the Macau government’s total revenue in 2015.
The city 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.
The Macau government fiscal surplus for 2015 was down by 67.6 percent year-on-year to MOP29.3 billion, compared to MOP90.3 billion in 2014. The government’s budget for last year – revised in May to account for the slowdown in the casino industry – forecast a full-2015 surplus of MOP18.8 billion. The surplus figures exclude the financial performance of autonomous bodies linked to the Macau public administration.
Macau’s GGR in 2015 declined 34.3 percent compared to the previous year to MOP230.8 billion, according to official data.
The Macau government forecasts GGR to come in at MOP200 billion in 2016, an average of MOP16.6 billion per month. Casino GGR in January came in at MOP18.7 billion, down 21.4 percent from the prior-year period.
The government has said it expects to collect a total of MOP70 billion in fiscal revenue from direct taxes on gaming this year, and a budget surplus of MOP3.5 billion.
Despite the sharp decline in surplus expected for 2016, the Macau government is likely to remain in a “very comfortable” financial position, meaning there is little pressure for policy easing in support of the city’s casino industry, Morgan Stanley Asia Ltd said in a research note last month.
Deutsche Bank AG analyst Karen Tang said in a note earlier this month that the institution sees “Macau [gaming industry]’s problem as a structural demand issue which policies cannot fix”.
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Daisy Ho Chiu Fung
Chairman of casino operator SJM Holdings Ltd