Macau Casinos Receive Major Tax Break
LISTEN TO THIS ARTICLE:Macau's Chief Executive, Ho Iat Seng, has announced a significant tax exemption for the city's six gaming concessionaires. He’s granting them a five-year exemption from profits tax related to gaming operations, retroactively applicable from January 1, 2023.
Casino Operators to Save Millions
This exemption, reminiscent of a previous arrangement, applies to all gaming entities. Galaxy Entertainment Group, Melco Resorts, MGM China, Sands China, SJM Resorts and Wynn Macau will receive breaks on paying taxes on profits derived from casino gaming and other gaming activities.
./ Related: Macau Casino Tax Revenue Continues to Reach New HeightsWhile this exemption offers some relief, the concessionaires are still obligated to contribute gaming tax revenues to the government. This is 40% of their gross gaming revenue (GGR).
Clarifications from Macau's Finance Bureau in 2019 outlined the rationale behind the exemption, citing the avoidance of duplicate taxation on the same source of revenue. The exemption aligns with Macau's gaming legal framework and aims to foster a conducive environment for gaming operators.
However, the Finance Bureau underscored that non-gaming revenues of concessionaires and shareholders' dividends remain subject to profits tax.
Macau Revenue Projections on the Rise
The announcement of the tax exemption is among the factors contributing to bullish forecasts for Macau's gaming industry this year. Citigroup has revised its projections for Macau's gaming sector in 2024, anticipating a substantial increase in GGR, potentially reaching MOP231.3 billion (US$29 billion) this year.
Analysts George Choi and Ryan Cheung at Citigroup attribute this upward revision to the impressive performance observed in January, with approximately MOP19.34 billion (US$2.4 billion) in GGR. The duo noted that despite the typical slowdown before the Chinese New Year, mainland Chinese visitors continue to demonstrate robust spending habits in Macau, driven partly by music concerts and other events.
Citigroup's full-year forecast suggests a notable 79% recovery compared to pre-pandemic levels in 2019. Looking ahead, Citigroup anticipates a surge in casino revenue for February, projecting up to MOP19.5 billion (US$2.42 billion), an increase from their previous estimate of MOP18.5 billion (US$2.3 billion). This optimism stems from expectations of increased spending during the festive period, particularly during the Golden Week, a traditional holiday period in China.
The research arm of Citigroup suggests a potential daily run-rate of MOP567 million (US$70.3 million) for the first 11 days of February. This could be followed by an acceleration to MOP900 million (US$111.6 million) per day during the last six days of the Golden Week. They suggest it could then stabilize to a daily average of MOP655 million (US$81.22 million).More Business News
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