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Argentina – Two per cent tax to be applied to every Buenos Aires’ slot machine win

By - 3 December 2018

The government led coalition Vamos Juntos has approved the Fund for Integration and Social Development (FIDeS), to finance infrastructure and assistance programs in social areas.

The new fund will be funded partly by resources generated from a two per cent new tax imposed on the prizes awarded by slot machines. In an acrimonious debate, The Buenos Aires City Legislature approved the bill on Thursday.

The budget will be allocated annually by the local administration, to which will be added donations, plus the two per cent on all prizes awarded by all slot machines in the city. Owners of slot parlours will act as withholding agents and will be responsible for collecting the new tax.

According to the government, the cornerstone of the new project will be the prevention of gambling addiction. The government has already put in a number of measures in place such as help lines for those who might need guidance when it comes to possible gambling addiction and argues that the new 2 per cent tax on winnings could discourage the use of slot machines.

During the debate, Ms. Paula Villalba, chairperson of the Budget Committee, briefly explained the social purpose of this new source of revenue as well as its benefit to the contribution against the expansion of gambling.

However, these arguments were emphatically rejected by a number of lawmakers who said that they were against gambling. They also argued that the sum retained was a meagre amount when it came to discouraging gambling and it failed to cover the negative social costs. The law was finally approved with 33 positive votes from the Vamos Juntos block and 25 votes against.

The new bill had already been signed by mayor of the city Horacio Rodríguez Larreta and his Minister of Economy, Martin Mura. The norm indicates that the new fund will be earmarked specifically “for the financing of programs of infrastructure, maintenance and assistance, in health, education and social development”. It will be composed mainly of a contribution of 2 per cent tax on all prizes awarded by slot machines in the city. The measure will be imposed on players when betting on the slots located in the capital both in the racino located under the racetrack in Palermo and the floating casino in Puerto Madero.
The Buenos Aires initiative is similar to a bill recently presented by the Governor of Buenos Aires, María Eugenia Vidal. Vidal’s new Budget Bill for 2019 if passed will impose a two per cent tax on slot machine winnings.

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