By Robert Hart, Staff ReporterTHE MINISTRY of Finance and Planning has rejected lottery company Supreme Ventures Ltd.'s $500 million proposal for an advance of Government tax revenues.
Consequently, the Government will proceed with its proposed implementation of a 15 per cent tax on winnings from gaming, with the exception of horse racing.
The decision, according to Dr. Omar Davies, the Finance Minister, was made after examining a written proposal submitted by Paul Hoo, president and chief executive officer of Supreme Ventures.
"I'd prefer not to go into details of the proposal, but partly one would be required... to make commitments for the future which, in terms of tax matters, is not a possibility," Dr. Davies said during yesterday's sitting of the House Parliamentary Committee on Taxation Measures.
The Tax Committee was meeting to examine and make final recommendations on submissions, made by the citizenry, in response to Dr. Davies' immense widening of the tax net in his April 2003/2004 Budget Debate presentation.
DANGEROUS PRECEDENT
Dr. Peter Phillips, Tax Committee member and Minister of National Security, concurred with Dr. Davies's decision, suggesting the acceptance of the proposal could have set a dangerous precedent.
"As I understand it, the other company (Jamaica Lottery Co. Ltd.) has indicated that it is in support of the proposal. The question of equity arises, but beyond that, (it) is a quite tremendous and very complex issue of precedence," Dr. Phillips said.
During the previous Tax Committee hearing, on July 16, Mr. Hoo caused a stir when he made the $500 million offer. He, however, tied a few caveats to the proposal.
"The Government must be willing to rescind its 15 per cent taxation on punters' lottery winnings," he told the Committee.
"Also, there should be no changes in taxes during the life of our current eight-year contract. In addition, a task force has to be put in place to stem the flow of illegal bookmaking we have been losing an estimated $10 million to $15 million daily as a result."
Stating that he could not respond to a verbal proposal, Dr. Davies had requested that Supreme Ventures submit the offer to the Finance Ministry in writing. This, he said, was received on Friday and the Government's decision subsequently made and the lottery company informed.
Supreme Ventures said yesterday that while "we are disappointed with the decision for reasons we have previously expressed, as a good corporate company, Supreme Ventures will now pursue the implementation of the necessary technological changes to our system to facilitate the collection of the new tax."
