Webshop tax discriminatory, Davis says

Progressive Liberal Party (PLP) Leader Philip Brave Davis said a tax on webshop winnings, set to come into effect next year, is discriminatory because it does not apply to casino winnings.

Davis said the PLP does not support the tax, claiming it will only cause more pain for Bahamians.

“It proposes more taxes, which will hurt Bahamian persons,” he said during a press conference.

“The country cannot afford additional pain, and that will push the country into further recession.

“There is no pro-growth strategy in a country where unemployment is as high as 40 percent. 

“We oppose the imposition of taxes on webshop game winnings by Bahamians when you are not taxing winnings by foreigners in the casinos.

“These new taxes are discriminatory and short-sighted. This strategy is fundamentally flawed.”

Citing significant revenue losses as a result of COVID-19 and Hurricane Dorian, Minister of State for Finance Kwasi Thompson 

announced last week that the government will implement a tax on gaming winnings on January 1, 2021.

Financial Secretary Marlon Johnson told The Nassau Guardian that the tax on winnings could potentially yield up to $15 million through the end of the fiscal year.

In May 2018, the government announced a sliding scale tax on gaming house revenues and a five percent stamp tax on deposits.

However, webshop operators labeled the taxes discriminatory, unfair and wrong and claimed the increase in taxes would cause them to lose business.

Legal action from gaming operators forced the government to come up with an alternative tax structure.

The government and gaming house operators eventually agreed to a new scale, which taxes gaming houses with net taxable revenue from $0 to $24 million at a rate of 15 percent, and those with net taxable revenue over $24 million at a rate of 17.5 percent.

They also agreed to a five percent tax on winnings up to $1,000 and a 7.5 percent tax on winnings over $1,000.

However, Attorney General Carl Bethel said the tax will not apply to casinos.

“They bring…millions of tourists into this country every year who pay hotel room tax in addition to the taxes that the casino pays, who pay VAT (value-added tax) every time they buy something to eat or go out into the community, and who contribute enormously to the gross national product and the wealth of hundreds of thousands of Bahamians who either work in the hotel industry or provide services or other things to the hotel industry such as the Jet Ski operators, the hair braiders and the craft markets,” he said.

“So, the fact is there is a different economic module associated with casino gambling that does not apply to the gaming houses.”

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source https://thenassauguardian.com/webshop-tax-discriminatory-davis-says/