Tax hike worries the Panamanian industry

Panama’s gambling industry hit by a 5.5% consumption tax is starting to have effect on the local casinos as objections rise across the nation. Local casinos and the entire Panamanian gaming industy is having a hard time due to the 5.5% consumption tax as they are starting to loose benefits from operations. The industry recorded a 2.9% drop on the year-on-year revenue last year, the only exception being Codere who reported an extraordinary income.

“[The consumption tax] is totally absurd and unfair to say the least and is affecting players’ willingness to attend casinos,” said Antonio Alfaro, president of Panamanian trade body ASAJA, adding: “No one in their right mind would look favourably on a levy that does not apply to players’ winnings, but solely their intention to play.”

As Panama pursues its dream to place itself as a possible portal to LatAm for the Chinese tourists, this tax hike is seriously influencing the gambling industry’s achievement with offshore players. “The greatest impact has been seen in table gaming participation, which is the preferred form of gambling amongst tourists,” Alfaro stated, arguing that tourism won’t benefit casinos as long as the levy stands at 5.5 per cent.

“We consider that it’s time to put a stop to this, to establish a moratorium on further casinos, and to not authorise any further licences for however long is prudent,” he said and asserted: “The government should rescind the 5.5 per cent tax – at least for table games – in order to stimulate the tourist market and to permit the casino industry the chance to recover.”

Source: focusgn.com