Financial secretary: Patron tax would have created tax compliance issues

The government is set to do away with the controversial patron tax on the gaming sector. Financial Secretary Simon Wilson said it is because the International Monetary Fund (IMF) has found – and the government agrees – that the sector is over-taxed. He said any further taxation of the sector could result in non-compliance from gaming companies.

Wilson said the gaming sector is currently the most “healthy tax sector in the country” and contended that the government would do itself an injustice by imposing further taxes on gaming house owners.

“If you read the IMF report on taxes, what it points out is the gaming sector of The Bahamas is the most healthy tax sector in the country, at rates maybe six to seven times that of any other sector in terms of profits,” said Wilson.

“When you look at that and you realize that if I’m taxing one sector at this level, what it’s going to do is create more problems with compliance for the 

government.

“People will start evading tax by going to elicit gaming or not reporting and so forth. 

“So from a Ministry of Finance perspective, we made the recommendation that perhaps in terms of net impact of this patron tax and we look at the counter factors, it may not be a prudent thing to go ahead with this.”

Wilson explained that the government has never collected a patron tax from the gaming sector, as the sector tied up it implementation in litigation.

The government hoped to implement the tax on patrons’ winnings at five percent on winnings up to $1,000 and 7.5 percent on winnings over $1,000, and hoped to collect $23.1 million in taxes last fiscal year if the tax had succeeded in being implemented at the beginning of 2021.

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