PLP Chairman Fred Mitchell.
PROGRESSIVE Liberal Party Chairman Fred Mitchell said the impending imposition of a winnings tax on web shop patrons will lead to reduced player participation and layoffs in a sector that employs more than 3,000 workers.
In a statement issued yesterday, Mr Mitchell said while he understands how desperate the government is for revenue, the impending tax appears to be an “assault” on the web shop sector.
He said: “Has the government really conducted or thought about the cost benefit analysis of the proposed imposition of the tax on Bahamian users of web shops and their winnings?
“We understand the desperation of the FNM government for revenue but does the FNM really at this time of economic and health crisis, want to impose a tax which will affect poor and middle-class Bahamians? The foreign visitor pays no taxes on their winnings.
“Further, this appears to be a direct assault on businesses in the web shop gaming industry.
“. . . We are advised that the revenue from this new tax will amount to some six million dollars,” he said. “What is six million dollars when compared to the more than $1.2 billion needed in this fiscal year to close the largest budget deficit gap the FNM has projected to incur in the country’s history?”
However, Tribune Business previously reported that the new winnings tax is projected to generate between $10m-$15m annually in extra revenue for the Public Treasury. While a relatively small sum in the overall fiscal scheme of things, it will certainly shrink gamblers’ winnings at a time when they will be hoping to land every cent possible due to COVID-19 related high unemployment and income cuts, Tribune Business reported.
“The last minister of finance, the disgraced Peter Turnquest of the FNM, made a huge mistake in raising the VAT and badly miscalculated the yield from the tax,” Mr Mitchell also said. “Now the new FNM finance minister is not considering that when the tax is imposed it will cause not only a cut in player participation, but will lead to layoffs in an industry which hires 3,500 people. This action will further cut national spending and thereby negatively impact government revenues.
“Where is the economic plan to really grow this economy instead of picnicking on the carcass?”
Last week, Senator Kwasi Thompson, the newly-appointed minister of state for finance, told the Senate that the government plans to finally implement the long-anticipated levy on gaming patron winnings from New Year’s Day onwards.
“To help counter the revenue losses, starting on January 1, 2021, the government intends to implement the gaming tax on winnings, passed in the House of Assembly in 2019 as part of the Gaming House Operator Amendment Regulations,” Mr Thompson revealed.