The Macau government will turn again to its financial reserve to compensate for the lack of tax revenue from the city’s gaming industry. The revised budget proposal provides for an increase of MOP6.34 billion (US$790.3 million) in funds allocated from the financial reserve.
The information was disclosed in a Friday statement from Macau’s Executive Council, an advisory body that supports the work of the city’s chief executive. The bill has been submitted to the Legislative Assembly, and the government has requested it be dealt with urgently to get it approved by legislators.
In the document, the government said the aim of the bill was “to maintain the financial balance of the Macao SAR budget and compensate for the reduction in revenue” from the casino industry.
Aggregate casino gross gaming revenue (GGR) in the first 10 months of 2021 stood at nearly MOP72.15 billion, up 57.3 percent on the prior-year period, but still shy of the government’s original forecast.
The Macau government was originally forecasting 2021 casino GGR of MOP130 billion. That was prior to Macau’s reports of local Covid-19 Delta variant infection cases in August and October, which subsequently affected the city’s casino revenue. The revised budget does not mention a new forecast for full-year casino GGR.
For the first 10 months of this year, the Macau government has collected approximately MOP29.54 billion in gaming tax, accounting for 59.1 percent of the MOP50.01-billion that it had estimated to achieve in full-2021.
The bill also said the outlook for public revenues in the remaining months of 2021 was “not optimistic,” given the continued impact from Covid-19. Because of the pandemic, it “has not yet been possible for public finances to achieve a balance between revenue and expenditure,” it added.
The 2021 revised budget reduces estimates from other revenue items by MOP16.72 billion. It also cuts the government’s expected spending by MOP10.45 billion.
In October, the government had already revised its budget by injecting MOP2.30 billion from the financial reserve, in order to cover the expenses of eight measures aimed at supporting local small- and medium-sized enterprises.
Macau’s Secretary for Economy and Finance, Lei Wai Nong, had said in September that the government would adjust its full-year forecast for casino GGR.
Earlier this month, the government said it estimated the city’s 2022 casino GGR will be MOP130 billion, under half the MOP292.5 billion Macau achieved in full-year 2019, prior to the advent of the Covid-19 pandemic.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract