The Macau government says it collected MOP76.47 billion (US$9.49 billion) in tax revenue from the city’s gaming industry in the first eight months this year. The tax revenue collected from the gaming sector is up 1.5 percent so far this year compared to the MOP75.32 billion collected in the prior-year period.
The increase came despite a year-on-year fall of 1.9 percent in Macau’s casino gross gaming revenue (GGR) in the first eight months of 2019, but the two figures are not directly comparable for a number of reasons. They include the fact there is typically a delay between the point where GGR is recorded in Macau casino operations, and the point at which tax is registered by the Macau government as having been paid on such play.
The government’s Financial Services Bureau releases the data to indicate the general health of the city’s coffers. The figures published on Thursday showed the sum collected so far this year was 77.9 percent of the amount of tax revenue from the gaming industry the government has budgeted for the whole year. The government had forecast it would collect about MOP98.23 billion this year from the gaming sector.
Illustrating the importance of the gaming sector, the latest data indicated that revenue from gaming collected so far in the calendar year accounted for about 89.6 percent of the MOP85.36 billion the government collected from all sources.
Government current revenue from all sources so far this year was 74.2 percent of the amount budgeted for over the course of the whole year.
The government taxes the gross gaming revenue of Macau casinos at a rate of 35 percent, but other levies on casino gaming raise the tax rate to 39 percent, in effect. Taxes on the Macau gaming industry also include levies on the income of Chinese traditional lotteries, horse racing, instant lotteries and tax on commissions earned by operators of gambling junkets.
In calculating its budget, the government tends to be conservative about estimating the amount of revenue it gets from gaming. The government has budgeted for a fiscal surplus of more than MOP18.06 billion for the whole of 2019. At the end of August, its surplus was MOP38.08 billion, official figures indicate.
The Macau government ended 2018 with a fiscal surplus of MOP53.87 billion for the full year.
Despite the city’s large surplus and lack of public debt, Fitch Ratings Inc has maintained its credit rating for Macau at “AA”. The institution has cited as factors that decision the volatility recorded in Macau’s gaming-influenced gross domestic product, the city’s “concentration on the gaming sector and tourism from mainland China, and Macau’s susceptibility to changes in China’s broader policy environment”.
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“We see that basically the ‘golden’ periods [for Macau's casino industry] are all concentrated in the second half of this year”
Lei Wai Nong
Macau’s Secretary for Economy and Finance