The Macau government collected a total of MOP101.1 billion (US$12.7 billion) in direct taxes from gaming during the first nine months of 2014.
The figure is up 9.1 percent from the same period a year earlier, according to data disclosed on Monday by Macau’s Financial Services Bureau. But it shows a slowdown from the 11.1 percent growth in the first eight months of the year.
Total government revenue for the period reached MOP120.1 billion, an increase of 6 percent year-on-year. The growth declined from an 8.2-percent increase in the January-August period.
The slowdown in expansion of the government’s revenue is a consequence of the declining gross gaming revenue (GGR) in the city. The contribution of direct gaming taxes as a percentage of all public revenue has been increasing in recent years.
Macau’s casinos have seen four consecutive months of declines in gambling revenue since June, which analysts have blamed on a combination of supply side factors and demand side ones. They include a cyclical issue of tighter liquidity conditions for the credit-issuing junkets, a reduction in the number of transit visas available to high rollers, and the crackdown on corruption in mainland China. Macau GGR for September fell by 11.7 percent year-on-year to MOP25.6 billion.
Direct taxes from gaming brought in 84.2 percent of the Macau government’s total revenue in the first nine months of 2014.
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.
Government spending in the January-September period amounted to MOP40.8 billion, meaning Macau ended the period with a surplus of MOP79.3 billion, up by 2.2 percent from a year earlier. In the first nine months of 2013, the government’s surplus was up by 26.2 percent from the previous year.
Macau’s Chief Executive, Fernando Chui Sai On, said last week that next year’s cash handouts for permanent and non-permanent residents would be decided based on 2014’s fiscal surplus.
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”The Macau government is not aiming to trivialise or drive out the junket sector, but to regulate the sector so that it would not hurt Macau’s reputation”
Alvin Chau Cheok Wa
Chief executive of privately-held VIP junket business Suncity Group