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Peru – Court threat over new gaming tax

By - 21 September 2018

The Peruvian Association of Entertainment and Gaming (APEJA), plans to fight the imposition of a new tax in the courts as they argue it will damage Peru’s growing gaming sector. The Selective Consumption Tax (ISC) an excise tax, has until now been imposed on the sale and import of certain goods such as fuels, cigarettes, beer, liquor, soft drinks but will now that apply to casinos and slots as well for the first time.

Constante Traverso, President of APEJA said that the new rate in effect raised taxes from 12 per cent to 17 per cent. The government recently approved Legislative Decree 1419 that modifies the General Sales Tax Law and the ISC, which specifically means that casinos and slots will be subject to a specific system of money payable for each table and slot. Up until now, the ISC tax had not been applicable to gaming establishments. In addition, it is expected that the National Superintendence of Tax Administration (SUNAT) will carry out an industry wide audit in order to determine how net income is fixed when it comes to table games and slots.

The government is currently considering maximum and minimum limits as well as fixed amounts for both. President of APEJA, said casinos had previously paid 20 per cent the gross income but in 2002, the Constitutional Court ruled that this amounted to confiscatory taxation. Congress then decreased the rate from 20 per cent to the current rate of 12 per cent. Peru has seen of one of the most remarkable success stories in the Latin American gaming market in the last 10 years.

Today the industry generates more than US$1bn per year. Thanks to the efforts of a newly established gaming board, The General Directorate of Casino Games and Slot Machines (DGJCMT), the gaming landscape in Peru has changed from a situation where less than 4 per cent of gaming operations were regulated by the government to a situation where illegal gaming has all been eradicated and where all slot machine transactions are monitored and in real time by a central government-controlled server.

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