Supplier News
Panama – Tax revenue down by 16 per cent in Panama
By Phil - 9 September 2015
According to figures released by the Gaming Control Board (JCJ) from January to July tax revenue generated by gaming decreased from US$59m to US$49.6m, a decrease of US$9.4m (16 per cent) compared to the same period in 2014.
However, although it would seem that the demand for gaming in Panama is decreasing the difference in the amount of gaming revenue generated for the state is due partly to the number of new operators who began to operate in the market in 2014. This is because new operators in Panama are made to pay a one off fee once they go into operation.
According to figures released by the JCJ, the state obtained on average US$7.0m per month from gaming. President of the Association of Managers of Gaming (ASAJA), Antonio Alfaro said that the latest figures show that the casino industry is less robust than it was before.
“Previously activity was distributed amongst 40 operators, but now there are more slot parlours and casinos operating in the country, which means that due to the growth in competition traditional casinos are no longer registering the same profits or contributing to the coffers of the state as before.”
He also criticised Law 23: the new tax which operators have had to pay since May. “Something that has definitely impacted activity is the new tax which has taken effect, because only in its first month of operation, the members of the ASAJA, recorded US$3m less via slot machines alone,” he said. Mr. Alfaro then explained that the new tax has had a direct impact on the operator which will in turn reflect the amount of tax revenue generated for the state.
Law 23 applies a tax on cash withdrawals from casinos of 5.5 per cent. The previous law stated that seven per cent was payable on pay-outs of US$300 or more via slot machines. However the 5.5 per cent tax applies now to all cash withdrawals made in casinos, including tips to employees, who have already expressed their complaints on the grounds that tips form part of their salary.
In June the ASAJA complained that new regulations stipulating a tax on cash withdrawals by customers in Panama’s casinos are now being plagued with a number of technical issues which make it almost impossible to collect the tax. The ASAJA has also called for exceptions to the tax for horse race betting not only in the President Remón race track but also all sports betting centres as many already face closure.
The news comes at a time of increasing concerns over the rise of problem gambling in Panama. The ASAJA has submitted a draft law to the National Assembly which would allow for exclusion and self-exclusion for gamblers in Panama. There are two drafts of the bill: one that will be discussed in the Health Committee which establishes the prevention and treatment of problem gambling and the other draft which will be discussed by the Committee on Labour, Health and Social Development.
