Taxes on gaming accounted for 83.4 percent of all Macau government revenue in the first two months of 2017, according to data issued by the Financial Services Bureau.
Gaming tax totalled MOP14.14 billion (US$1.78 billion) in the two months to February 28, up 5.4 percent from the prior-year period. The Macau government’s total revenue for the period increased 5.3 percent year-on-year to just over MOP19.96 billion, said the data issued on Thursday.
The city is currently forecasting that – in terms of the government’s authorised budget for 2017 – direct tax from gaming will contribute MOP71.86 billion this year. That would represent 79.1 percent of the MOP90.86-billion public revenue currently being forecast for the city.
The finance bureau further stated that under the 2017 authorised budget, government expenditure is slated to be just under MOP85.30 billion, and the government surplus just shy of MOP5.57 billion.
The Macau government surplus in the first two months of 2017 had already reached MOP11.78 billion, more than double the government’s forecast for the full year.
Macau’s direct tax on gambling at 35 percent of the gross – plus other contributions – bring the effective tax rate on casino wagering in the city up to 39 percent. The city’s authorities also charge premiums on the gaming tables and gaming machines used by the casino operators.
In an Asia Pacific sovereign debt report covering the second quarter 2017, made available on Friday, Fitch Ratings Inc maintained Macau’s “AA-” rating and “stable” outlook for the city’s international default rating for long-term debt in foreign currency and in local currency.
The report stated Macau had no general government debt and “large fiscal buffers”.
“Fitch estimates the 2016 budget surplus was 6.2 percent of GDP, above the government’s original budget estimate of 1 percent, due to a higher gaming revenue intake,” said the document from analysts Andrew Fennell and Mervyn Tang.
“Macau’s sovereign ratings are underpinned by the territory’s credible policy framework and exceptionally strong public and external finances, which continue to strengthen despite three consecutive years of economic contraction,” stated Fitch.
But the ratings agency added: “The ratings are constrained by Macau’s high GDP volatility, elevated concentration on the gaming industry and tourism from mainland China, as well as its susceptibility to changes in China’s broader policy environment.”
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”China has been strengthening the control over capital flow, and the impact of that has already been reflected [on Macau’s gaming revenue trend]. There should not be any bigger impact from the new… legislation [on the mainland] … on the gaming revenue trend here”
Wilfred Wong Ying Wai
President of Macau casino operator Sands China