The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

WEBshop operators are not pleased about having their businesses taxed at a higher rate than casinos, attorney Wayne Munroe said yesterday in response to conditions stipulated in the recently tabled Gaming Bill.

Mr Munroe said the higher taxes for Bahamian owned gaming businesses was “discriminatory”.

However, the lawyer, who represents several webshop operators, expressed confidence that the issue will be revisited if the levied tax proves too burdensome for the businesses to handle. He added that webshop operators are also willing to make sacrifices to help reduce the country’s national debt.

According to the Gaming Bill which was tabled on Wednesday, the holder of a gaming house license will be taxed either 11 per cent of taxable revenue or 25 per cent of earnings before interest, taxes, depreciation and amortisation are deducted, depending on which is higher.

“I’m still studying (the bill) in conjunction with the existing laws,” Mr Munroe said when contacted for comment yesterday.

He added: “But the Bill is what it is. Some of it we’re happy with but some we’re not too pleased with, but nobody’s going to be pleased with everything.”

“We’re not happy with the tax rate,” he continued. “The fees, you can look at it, if you compare it to casinos it is discriminatory. We made representations to gaming consultants that we shouldn’t be taxed higher than casinos, but we live in a world with realities. Two rating agencies have downgraded us recently, requiring the government to decrease its debt. This is a new area of taxation which has never been taxed before. Webshop operators are Bahamians willing to be taxed and to make sacrifices. They are looking at this from a long-term perspective.

“If their contributions result in this country turning around, then in the long-term they may have the taxes reduced. But if it is so high that it makes industry unable to function, the government will look at that. After a year, 18 months, we will see how things are going.”

When contacted for comment, Legal Affairs Minister Damian Gomez explained that the government approached the issue of taxing webshops differently from the way it approached taxing casinos.

“At present there is no tax rate on interactive gaming,” he said. “That type of gaming is not included in licenses. We negotiated what we are going to be doing, however, we worked with casinos relative to what they are doing and had to take into consideration heads of agreements we entered into. Both of the relevant heads of agreements were signed under the FNM and we had to honour those agreements so we negotiated an increase with the casinos and they accepted that they would be taxed a percentage of 5 per cent on their earnings. So whether or not the local players in the market are taxed at that rate or not, they are governed by different circumstances because we didn’t have the strictures of contractual arrangements affecting webshop operators who would be licensed. It’s two different scenarios under which we are operating from.

“Furthermore, none of the webshop operators have invested anywhere near $2bn in the case of Atlantis or $3bn in the case of Baha Mar. But ultimately we are operating in an environment governed by heads of agreement and to the extent we aren’t, one is able to negotiate and that’s what we did.”

The House of Assembly is expected to debate the Gaming Bill on Wednesday.