By RICARDO WELLS
Tribune Staff Reporter
AS the legal and regulatory framework for a tax agreement between the government and domestic gaming houses nears its competition, Attorney General Carl Bethel has warned those still fighting the deal to "pay your tax" and go to court later.
His comments came at the close of his Senate contribution to the 2019/2020 budget debate.
He declared that as of the passage of the new agreement, any entity or legal counsel endeavouring to "make a cottage industry from lawsuits challenging the laws that we have passed" would be free to do so, but is still mandated to pay all taxes due to the government.
"…To reflect the agreement we have with the major gaming houses, which will pass in July, anyone that wants to have a… lawsuit -- pay your tax, that is what the law says," Mr Bethel asserted.
"Pay your tax. When we have a settled law, you can sue all you want, just pay your tax and if the courts say we owe you something, we'll settle it up afterwards."
The Minnis administration, as a part of its 2018/2019 budget, imposed a sliding scale tax schedule on the industry. The schedule aimed to tax houses at a progressively higher rate the more "taxable revenue" they earn.
The tax scheme garnered several lawsuits from various houses, with each taking issue with the scope of the tax structure.
Legal proceeding pushed tax collections in the sector back from the onset of the 2018/2019 budget period to the start of the 2019 calendar year.
Ultimately, the government believed that all web shops were on board with the mid-February 2019 settlement agreement, however, Island Game, Paradise Game, Asure Win and the FML Group of Companies took the position that no retroactive taxes should be owed for the 2018-2019 fiscal year's first half.
Under that deal, back taxes for the first half of the 2018-2019 budget period from July 1, to December 31, 2018, -- were to be levied at the old web shop taxation rate of 11 percent of gaming revenues.
This was replaced by the new sliding scale operator tax, and its new rates of 15 percent (for revenues under $24m) and 17 percent (for over), with effect from January 1, 2019.
Tribune Business subsequently revealed that Paradise Games and Asure Win had paid taxes due for July 2018 and then stopped, while FML and Island Game had yet to pay anything at that point.
A new agreement was agreed earlier this month, with Tourism Minister Dionisio D'Aguilar confirming the new settlement would involve no further changes to the mid-February deal.
In the interim, he said the government had still been collecting the majority of its revenues from Island Luck, Ultra Game, and Chances, which accounts for 76 percent or three-quarters of the sector's tax base.
Addressing the current state of affairs in the sector yesterday, Mr Bethel said: "I am not threatening (any entity), the law requires, where there is a settled tax law, that if anybody wishes to challenge it they must pay their taxes pending. That is in the law, that is the law of The Bahamas."
He added: "So it is not a threat for me to say what the law is. If some lawyers want to make a cottage industry off of suing, no problem. If the court supports you, and this is what I said, if the court supports you, the government will do whatever the court says. But the law is clear on this matter.
"If there is a settled law passed and you have a dispute with it, you are entitled to sue, but you must pay your taxes and comply with the law until a court says otherwise," he concluded.
The government anticipates collecting $50m in taxes from the web shop sector annually, split between $35m paid by the operators and $15m from the new levy on patron winnings.
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