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Argentina – Minister of Economy leaves door open for tax rise on bingo halls
By Phil - 28 November 2016
The Minister of Economy for the province of Buenos Aires, Hernán Lacunza has not ruled out a tax increase on bingo halls and has the left open door for members of the opposition parties to raise taxes for the industry in 2017.
While explaining to the legislature the calculation of expenses and the distribution of resources next year Lacunza said: “With the Governor there has still been no definition (on the issue) but if you put forward the issue of a raise on gaming I would be in agreement,” he said.
Last month it was revealed that the government of Buenos Aires had decided not to increase taxation on gross gaming revenues on bingos and casinos in the province. Casinos and bingos looked like as if they were heading for an increased tax burden after Lacunza and the Head of the Cabinet Federico Salvai announced that the industry would be forced to face a sharp increase on taxes as part of next year’s budget.
The government needs to raise taxes in order to meet the increased expenditures necessary in 2017 when there will be a sharp increase in government spending. However the governor of Buenos Aires María Eugenia Vidal and her economic team decided not to increase taxes on gross gaming revenue from 12 per cent to 19 per cent – a figure which would have in all likelihood led to a long legal battle in the local courts.
However days afterwards members of the Frente Renovador (Renewal Front) Party proposed the creation of a tariff of $20 pesos per person that would be payable either by bingo halls or by the player as an entrance fee. According to one proposal the $20 would be returned to the player in the form of tokens. The tariff would, according to members of the party, raise as much as $1.8bn half of which would go to the provincial government while the other half would be destined for the districts where the bingo halls are located. This would increase gaming income by the equivalent of around 2 per cent of gross gaming revenues.
The issue of increased taxation has already, according to some sources, led to the resignation of the Head of Lottery and Casinos, Eugenio Meliton López. López announced earlier this month that he will be leaving his post at the end of this year. It is rumoured that this was after a confrontation with the Minister of Economy after López warned against raising taxes on the industry.
The industry currently pays the highest gaming taxes in the country and a further tax burden could have a potentially devastating effect on the industry. Workers for the 46 gaming halls in the province of Buenos Aires are scheduled to mobilise on Thursday (December 1) to protest any new increases in taxes in front of the provincial Senate which they say will lead to job losses and bankruptcies.
