Deficit recorded for January and February
Macau continues to feel the pain of the coronavirus, as results for January and February show tax revenues in the region have drastically fallen.
At a meeting on Thursday, Lei Wai Nong, the secretary for economy and finance, revealed alarming figures from the first two months of Q1 statistics, highlighting a record deficit of $4.9bn.
revealed alarming figures from the first two months of Q1 statistics
There was also confirmation that additional tax breaks would not be forthcoming, despite the region’s tourism industry suffering from the outbreak.
Gross gaming revenue down
Macau operators are subject to a gaming tax, which is applied to gross gaming revenue (GGR). Previously the attraction of casinos to China, which has strict rules against gambling, has been a lucrative business. This has allowed Macau to levy operators with a 35% tax on GGR, in the case of some community causes this can raise to almost 40%.
While January fared slightly better in the run-up to Chinese New Year, as the big event was canceled due to the medical outbreak of coronavirus, it led to an 11.3% year-on-year drop in gross gaming where just $2.1bn was reported.
Lei Wai Nong did not seem to completely wipe out Q1, although he was hesitant to put forward an estimate, citing the ‘unreliability’ of the coronavirus and how circumstances are constantly changing.
No tax breaks forthcoming
Lei Wai Nong has oversight for the city’s casino and previously operators had suggested that he due the unprecedented start of the year, he might allow tax breaks. However, Lei said at the meeting that this could only occur after a thorough review of gaming laws throughout Macau. He said:
For now, we do not intend to introduce any changes.”
Galaxy Entertainment Group Ltd was one of the outlets to speak out in February. Vice-chairman Francis Lui Yiu Tung suggested that a tax break could be on its way “for the community of Macau.” But since a profit was made in 2019 due to taxes on GGR, the government may not need to take any drastic measures just yet.