By NATARIO McKENZIE
Tribune Business Reporter
A former Cabinet minister yesterday urged the government to work with web shop operators rather than “strong arming” them, adding: “They need the money.”
Obie Wilchcombe, the former tourism minister who oversaw the legalisation of gaming houses under the Christie administration, argued that the Minnis administration had lost a lot of positive ground with the industry.
“The back taxes that are due now has a lot to do with the decision made by the government last year when the sliding scale was introduced and led to a legal fight. That was their doing and it caused the suspension of tax payments. The government is now making demands to pay up but it sends the wrong message,” said Mr Wilchcombe.
“They need to work with the gaming houses because that’s what we did. The operators paid their taxes. They paid back taxes before we even got into discussions about licences. They didn’t agree with everything we proposed at first but we worked it out and they worked harmoniously with the Government. They paid their taxes and paid it on time. It was an important contribution to the Consolidated Fund. We needed the money then and the Government needs the money now.”
Dionisio D’Aguilar, minister of tourism and aviation, who currently has responsibility for gaming, this week warned operators to “get on board and pay your fair share to the Treasury” otherwise their licences will not be renewed if taxes remain owing.
He added that there was no good reason for continued foot-dragging by some operators now that the industry’s taxation settlement with the Government had been given legal effect, and revealed that two web shop chains had been waiting for the Gaming Board to confirm the “specifics” of the agreement before they began to pay taxes owing for both the first half of the 2018-2019 fiscal year and under the new structure.
“We’ve laid the legislation to concretise what was agreed between legal representatives of the operators and the Government,” Mr D’Aguilar told Tribune Business: “I strongly suggest that every operator begins to abide by these rules and pays the taxes, because these taxes are obviously accruing.
“If they don’t pay them this is a large mountain for them to climb to remain compliant, and they need to receive the necessary licences from the Gaming Board. If we feel they are non-compliant, then we’re not able to issue the licences unless they’re able to pay the taxes.”
Confirming that he expects all web shops to be current with their tax payments by the 2018-2019 fiscal year’s close at end-June, Mr D’Aguilar said: “I’m led to believe that for the period July 2018 to December 2018, the gaming houses are now paying those taxes.
“So in February they will pay for January and July of last year. Every month they will pay two months to catch up so that by the end of the fiscal year everyone will be current. I don’t know the specific numbers but they are paying the amount calculated. By June 30 they will be up-to-date.”
So-called “back taxes” for the first half of the 2018-2019 fiscal year - from July 1-December 31, 2018 - are to be levied using the web shop’s old taxation rate of 11 percent of gaming revenues.
However, Mr Wilchcombe said: “The truth is now the government is making demands as a result of a situation they created. It sends the wrong message. They should work with the industry as best they can. I believe more can be achieved that way; not in this adversarial fashion.
“This thing started with the Government taking a position. The gaming houses could have continued to pay taxes until they arrived at an arrangement. The gaming houses worked with us every step of the way, not that they agreed with everything, but we worked through it. We never had a stand-off. There was no negativity.”