Minister of Tourism Dionisio D’Aguilar.
By KHRISNA RUSSELL
Deputy Chief Reporter
krussell@tribunemedia.net
IN the face of backlash over the government’s proposed tax increase on web shop operators, Tourism Minister Dionisio D’Aguilar said the new taxation sliding scale for number houses is “set in stone”.
He also doubts jobs would be affected and web shop operations would have to close numerous locations because of the increased fees.
As he maintained the government’s decision to increase taxes on web shops is not discriminatory, the minister with responsibility for gaming said “all sins” are taxed heavily.
He added that the discussion on this matter needed to be shifted to the revenue and profitability of the industry.
Meanwhile, State Legal Affairs Minister Elsworth Johnson said web shops should be taxed in a way that brings equity to the social downfalls of the industry. He said currently the industry was not being taxed according to the international industry standard.
Gaming house operators have threatened to sue the government if it fails to engage them on what it called an “unconstitutional” and “discriminatory” sliding tax scale for web shops.
Leaders of the industry are adamant there would be job cuts and the closure of hundreds of web shops nationwide should the government decide to move forward with implementing the increase.
“As far as I am concerned it’s set in stone now,” Mr D’Aguilar said when he was asked by The Tribune if the sliding scale could be amended in the face of criticism.
He also said: “I just find it difficult for people to conclude whether it’s high or not without actually seeing the facts. You will see that there is no discussion on what the revenue figures are, no discussion on what the profitability figures are, so how can you conclude whether it’s high or not? So let’s have an intelligent conversation about it.
“I just think that everybody is using the hype for their own political gains to push a certain agenda. Let’s look at the numbers. Let’s analyse the numbers then come to a conclusion so that’s what I intend to do.”
“I don’t think it’s discriminatory at all,” the minister further commented. “I think you either agree that it’s a sin or it’s not a sin and if you agree that it’s a sin then all sins are taxed heavily. So, the crux of the discussion is where is the threshold, where is it high and where is it low.
“That’s the $45m question and that’s what we have to decide and when I speak to Parliament I’ll speak to that matter.”
Web shop operators have also raised concerns that 2,000 jobs will be lost and 75 per cent of the locations will close. They have said this hike is an intentional move to shut them down.
To this he said: “Absolutely not. I just think that all of the operators have to step back, analyse their statements and see how it can adjust.
“Yes you may have to adjust your business, but will it lead to widespread closures and shut downs? Absolutely not,” the tourism minister said.
“I don’t think so at all. But everybody has their view and everybody is pushing their agenda so all I would advise is you can’t conclude on this matter until you know the facts and until you know the numbers and there is what I find interesting is there is no discussion of the numbers, no one talks about the numbers.”
For his part, Mr Johnson said Bahamians should not replace enterprise and industry with a game of chance. He said in his opinion there is a 99 percent chance the gaming house will win while the patron loses.
“I think that is in all things we have to tax the industry in a way that would bring equity to some of the social downfalls of that industry and how do we pay for it,” he said during his budget contribution.
He also said: “I note the circumstances by which gaming was legalised. The question remains whether the industry, which is a lucrative one, was properly taxed at its inception.
“If one were to conduct a comparative industry analysis it would be clear that the current taxation regime does not meet the current international industry standard.”
Under the new proposed sliding scale, those web shops earning up to $20m in revenue will be taxed at a rate of 20 percent and those falling between $20m and $40 will be taxed at a rate of 25 percent.
Others earning between $40m and $60m will be taxed at a rate of 30 percent while those in the range of $60m and $80m at a rate of 35 percent.
Those between $80m and $100m at a rate of 40 percent and over $100m at 50 percent.
Comments
Chucky 6 years, 5 months ago
I think we can all see what's coming, the web shops will simply break themselves up into smaller business to keep below the lowest taxation threshold.
Nothing will be gained as far as tax revenue goes!
watcher 6 years, 5 months ago
Agreed. Either that, or the financial statements shown to Inspectors and auditors, will suddenly and mysteriously show profits under the minimum tax thresholds.
Well_mudda_take_sic 6 years, 5 months ago
It's well known the numbers thugs keep three different sets of books. One set is for the cartel, another for their eyes only and a third for the government regulators and taxing authority. The latter set of course shows the lowest revenues and profits.
Well_mudda_take_sic 6 years, 5 months ago
This won't happen because of the restricted number of web shop licenses granted by government.
Chucky 6 years, 5 months ago
wont change either, simply they will break up their companies into franchises or "group of companies" etc etc something like that
sheeprunner12 6 years, 5 months ago
No need to move on it ........ They pay their taxes or seize their assets ....... Good riddance.
TalRussell 6 years, 5 months ago
Ma Comrades, what we're not hearing are the voices "91,409 Constituents Elected" red shirts MP's, on their stand for National Lottery.. but then again most red MP's may just have become much comfortable their combination of carrots and sticks came to them via sitting in up in seats reserved House of Assembly governing party MP's. They all seem have accepted political PuplicPurse's Perks - generously handed out by Imperial PM of colony islands... then again there are the Comrades Marlon, Carl Wilshire and Dion, not even elected by the 91,409.
birdiestrachan 6 years, 5 months ago
perhaps the web shop owners can invest their money into wash houses and import duty free washing machines. It is a good idea to invest in other arears. Airlines is another good idea.
Dawes 6 years, 5 months ago
Sounds good, and wash house owners should invest in web shops. Oh wait no they can't as there is a 10 year moratorium, bit of discrimination there but web shops don't seem to care.
tetelestai 6 years, 5 months ago
Stop it, Dawes. The moratorium was not the web shops idea. That was put in by government to satisfy Bahamians who believe that these businessmen are the root of all evil.
BahamasForBahamians 6 years, 5 months ago
The general public should ignore this minister.
Once the gaming operators file their writ in the supreme court for this discriminatory tax and an injunction is given to halt the enforcement of it - the case should stall in the supreme courts and Privy Council for just enough time for this inept government to be replaced.
Well_mudda_take_sic 6 years, 5 months ago
Your great arrogance in supporting the criminal activities of the low-life thugs like His Royal Highness King Sebas and his sidekick Sir Craig is duly noted.
TalRussell 6 years, 5 months ago
Ma Comrades, the numbers houses, stands rake in additional wagers millions if offering early opportunity odds on who among the 35 red shirts MP's, goin' be's first, second , third, fourth, fifth and sixth House "Floor Crossers?"
DDK 6 years, 5 months ago
Crossing the floor to those that put the icing on the cake that got us in the mess is NOT the answer. Still, common sense is not always so common........
TalRussell 6 years, 5 months ago
Ma Comrade DDK, but wouldn't it tell 91,409 voting red shirts 10th May, 2017, a little bit more about principals held by 'cross walkers - actually remembering it was the constituents that got them hired sit up in People's Honourable House of Assembly?
Well_mudda_take_sic 6 years, 5 months ago
This comment was removed by the site staff for violation of the usage agreement.
Porcupine 6 years, 5 months ago
Agree on the lottery. What will it take to make the government listen to the people, and act in the best interest of the people? Voting doesn't seem to be working, does it?
TalRussell 6 years, 5 months ago
Ma Comrade, number sellers were NOT thugs. Criminal activities prior being regularized were NOT being thugs. Not even CLOSE, my comrade. Percy was dear friend mine and NOT a thug.
Well_mudda_take_sic 6 years, 5 months ago
This comment was removed by the site staff for violation of the usage agreement.
screwedbahamian 6 years, 5 months ago
I would be surprised if the real accurate financial reports from the Webshops reflect the Bahamian Gaming public receiving more that 10 percent of their wagers back in winnings. 90 cents of every dollar goes in the webshop boys pockets. If the WEBSHOPS CARTEL take legal action against the GOVERNMENT, Government should suspend and rescind the Licenses and suspend ALL WEBSHOP ACTIVITY until a legal decision has been rendered. Patrons of the webshop play by their rules or are removed from their premises.
John 6 years, 5 months ago
Casinos give their high rolling clients a $10, 000.00 (Ten Thousand Dollars) suite and a $2,000 hooker, or shall we say a" lady of the evening", no not a fighting Joe or a strumpet, unlimited drinks and a running account in their restaurants. So they virtually give away over $15,000.00 to one customer on a given night. And you gonna tell me they cannot afford to pay more taxes? What size was Sol Kerzners' yacht again, before he went and lost some of his money the money that caused him to lose Atlantis? And yes, there are foreign gambling addicts, who come to The Bahamas and lose everything, even the kitchen sink. Some have to be returned home at the government's (I mean taxpaying slaves') expense.
John 6 years, 5 months ago
"The house always wins, and it's now winning more." Maybe you've had a good night or two at the casino sometime in the past decade, but it's the house that has hit the jackpot. Visitors gambled and lost more than $27 billion at U.S. casinos in 2003, up from about $11 billion in 1993 — not that the casinos are passing much of that growth on to consumers. While the odds always favor the house, some casinos are changing the odds and payouts on table games to be even more in their favor.
Take blackjack. Instead of the traditional 3-to-2 payout — which means a player betting $20 would get $30 — some casinos are now paying 6-to-5, effectively reducing the payout by 20%. And almost every casino now uses multiple decks, stacking as many as eight in a single sleeve, which makes it harder for gamblers to keep track of which cards have been played.
In perhaps the most significant shift, an increasing number of casinos don't allow the dealer to hold on "soft 17," the term for a 17-point hand that includes an ace. Continuing the hand improves the house's odds by about 0.2%. It doesn't sound like much, but on a table that sees $100,000 in wagers on a given day, that adds $200 to the house's take.
John 6 years, 5 months ago
Think you're saving money by playing the penny slots? Think again. Slots and video poker machines with lower denominations have lower payouts than their more expensive cousins. The reason? The house takes in a lot more money on higher-value machines and wants to drive customers to them, says Rick Santoro, senior vice president at Trump Hotel Casino Resort
John 6 years, 5 months ago
"Politicians get rich off us." Casino executives and groups donated more than $10 million to federal political candidates and parties in the 2004 election cycle, according to the Center for Responsive Politics. That's in addition to millions more contributed to state and local politicians who have gambling issues in front of them.
Did D'Agular sever all his relationships with Bah Mar or is there still some conflict of interest?
Socrates 6 years, 5 months ago
this is straight forward. gov't passes laws, presents budgets, etc. Since these fellows don't want to pay more, go to court and see what u can do about it. they have money.. if you have a valid legal position, the court is duty-bound to find accordingly. if you don't, pay or get shut down. As for business impact, businesses have to adjust to all manner of change all the time. Deal with it.
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