The Macau government expects to collect MOP91.0 billion (US$11.28 billion) in direct taxes on gaming next year, according to its draft budget for 2019, presented this week.
It had been estimated in the government’s 2018 budget that direct taxes on gaming collectable this year would amount to MOP82.41 billion. As of the calendar year to October 31, the target had already been surpassed by 7.0 percent.
The Macau government pocketed MOP88.15 billion in fiscal revenues from direct taxes on gaming in the first 10 months of 2018, a figure 15.6 percent higher than in the equivalent period a year earlier, according to provisional data released by the city’s Financial Services Bureau.
The Macau government’s fiscal surplus for the period stood at MOP49.67 billion as public revenue – which mainly relies on direct taxes from gaming – increased at a much faster rate than expenditure.
The Macau government has a track record of taking a conservative approach when estimating gaming-related tax revenue in its yearly budgets.
Aggregate casino gross gaming revenue (GGR) for the January-October period was MOP251.38 billion, up by 14.3 percent in year-on-year terms. Direct taxes from gaming brought in 80.5 percent of the Macau government’s total revenue for the period..
In a note issued last week, Japanese finance house Nomura forecast a scenario in which Macau GGR next year could shrink by 3 percent, with VIP revenue declining 10 percent, mass revenue up by 4 percent and slot revenue increasing 3 percent. The brokerage did its calculations in the light of the slide in shares in Wynn Resorts Ltd after the company gave a gloom-laden outlook for its Macau operations for the fourth quarter of this year.
The Macau government has forecast a fiscal surplus of MOP18.06 billion for 2019, on total public revenue of MOP122.39 billion.
The Macau government levies a special gaming tax on casino GGR at the rate of 35 percent. It also collects about 4 percent of the gross in indirect taxes for social and promotional purposes, as well as a levy on each gaming machine, live dealer table and VIP room.
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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