The pros and cons of gambling
tribune242 editorial:
A SEVERE crackdown by Chinese police on football betting during the World Cup match after an online gambling ring -- called the world's largest-- was broken up in Hong Kong in June, shows that the Bahamas is not the only nation concerned about gambling.
According to the Xinhua news agency more than $100 million Hong Kong dollars was confiscated in June and 70 people arrested in betting on the World Cup.
In July as the police crackdown intensified on organised criminal gangs more than 5,000 people were arrested.
Although the East is noted -- at least in the movies -- for its gambling dens, betting on football is illegal in Malaysia, Singapore and Thailand because of its ties to the criminal underworld.
In a Financial Times article Jean-Michel Louboutin, Interpol's executive director of police services is quoted as saying: "As well as having clear connections to organised crime gangs, illegal soccer gambling is linked with corruption, money laundering and prostitution, and our operation will have a significant long-term impact on these serious offences as well."
In its July 10-16 edition, The Economist of London had an interesting feature on gambling and the pros and cons for legalising it.
It pointed out that trying to ban online gambling is doomed to failure because anyone with a computer can participate.
It concludes that although many dislike the idea of governments encouraging its citizens to gamble, a fine line can be drawn between encouragement and regulation. "Regulating something is not the same as encouraging it," the Economist argued.
"Better to treat gambling the same way as smoking: legalise it but make the casinos display the often-dismal odds of success (one in 176 million, if you hope to win America's richest lottery) in the same way the cigarette packets warn you about cancer.
"That would favour games of skill over the mindlessness of slot machines. People always will bet.
"Better that they do so in a legal market -- and know the form."
That was one opinion. We recall, while studying law in London, gambling was being discussed among the legal fraternity at the time.
A strong argument then was that it was best to bring it in from the cold and regulate it so that gambling debts could be settled in the courts rather than by criminals with knives drawn down a dark alley.
Those against gambling offered much the same argument as Archbishop Pinder and other churchmen in an attempt to protect citizens against their own destructive human weaknesses.
While the Catholic Church, said the Archbishop, recognizes that "gambling is not inherently evil there is the tendency of human nature to go to excess and to extremes.
"Thus what may be harmless in the beginning can, without proper restraints become quite harmful later on. The wisdom of the law as it now stands seems to understand this reality."
Many other countries in order to protect their citizens, either ban them from the casinos, or if allowed, charge them a heavy entrance fee.
A foreigner pays no fees. Mainland China, for example, keeps its casinos off island on Macau, where the visitor throws the dice, but access by its own citizens is strictly limited. A successful lottery is the only form of gambling on China's mainland.
Singapore welcomes the visitor to its casinos, but charges its own citizens $72. Many Asian governments remain wary of gambling and either ban its citizens, or make it difficult for them to have a little "flutter."
However, as governments need to raise taxes, the debate continues.
The Economist article is well worth reading, particularly as this is a debate that Bahamians will be entering into after the 2012 election.
It gives a balanced view of both sides of the argument.
July 22, 2010
tribune242 editorial
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.
Showing posts with label internet gambling Bahamas. Show all posts
Showing posts with label internet gambling Bahamas. Show all posts
Sunday, July 25, 2010
Monday, April 19, 2010
The Bahamas needs tax and spending reform
By Youri Kemp:
I was listening to the news just recently, where Prime Minister Hubert Ingraham, who also is the Minister of Finance, said something to the effect that he would not lean against anyone broaching the issue of taxing the illegal numbers racket in The Bahamas, by virtue of taxing the internet cafés that are reportedly "fronts" for internet gambling businesses.
However, I'm not quite sure how easy it is to tax the numbers racket through internet cafés in The Bahamas. For starters, you have to have them recognize that they are, in fact, running illegal gambling out of internet cafés -- considering that the authorities have not been able to produce solid evidence in order to prosecute anyone allegedly gambling in these establishments.
Secondly, what about the internet cafés that are legitimate internet cafés? Can't tax them... can you? Lastly, if I am running an illegal gambling racket through an internet café, then why would I want to pay taxes to the government for something I have been getting away with for so long?
Even if you put the work out for companies to bid on a national lottery, you still would be left at square one with the internet cafés that run the numbers racket and their subsequent prosecution.
It is no easy task and good luck to the persons tasked with sorting it out.
More importantly, however, if we have come to a point where we are speaking in open forum about taxing the numbers racket, seriously, it signifies that the government feels that The Bahamas is at a juncture where it needs meaningful tax reform for government revenue; the government, clearly, is not generating enough internal revenue in order to meet its obligations now; and that the prospects of meeting the debt service, is very bleak with the current system of taxation.
To be very blunt: the government has to tax. However, the term "tax reform” isn't necessarily supposed to have a negative connotation or stand for a pejorative slight of hand.
The word "tax", does evoke personal sentiments for obvious reasons and the word "reform" -- especially used by politicians -- is a code word of sorts for the refocusing of entitlements and simultaneously as a buzz word for business persons, which signifies more and unnecessary regulation. Which to business people means more time away from their business and more time dealing with a governmental agency with mentally challenged employees.
To be fair, government employees aren't mentally challenged -- although some who look like they shouldn't be makes one wonder -- and everyone doesn't understand what reform signifies -- either which way -- and no one wants to pay more taxes.
The truth is, however, The Bahamas government is in debt to over 40 percent of GDP -- with a widening deficit. Another clear fact is that The Bahamas doesn't have any streams of government revenue, other than from import taxes (where it gets over 50% of its revenue), National Insurance contributions, revenue from public corporations and government agencies and also through forms of public service charges and real estate; i.e., vehicle registration and real property tax.
Conversely, the Bahamas's tax to GDP ratio is about 18 percent. Which isn't that bad, considering Barbados, Jamaica and Trinidad is at 32, 27 and 38 percent respectively. But, The Bahamas isn't just like any other Caribbean country -- we do things a little different.
Firstly, we don't produce many agricultural products for mass consumption in The Bahamas, neither do we have a large export sector in terms of people involved in exports, away from the concentrated profits some firms make.
Another concern that compounds the lack of efficient and beneficial dynamism in the market place as it relates to an optimal and targeted tax mix is the reliance of import tariffs for government revenue.
While The Bahamas does not produce over 80% of what it consumes, and with the tax system as basic as it is, it has to tax imports heavily. As a consequence, this puts consumers and more importantly, low income consumer, at a disadvantage as the tax burden is disproportionate to what they spend on taxes in relation to what larger corporations and high income earners pay. For example, a 50 percent flat tax on all consumer goods means more to someone who makes $20k per year than someone who makes $100k per year and a flat rate for business licenses, means more to the small business person than it does for a large corporation.
Moreover, large industries such as banking and shipping, are virtually untouched as it relates to taxation -- no capital gains or corporate tax. Even the export of fisheries products is untouched as they relate to export taxes.
Some may argue that these low taxes are the reason why these industries are so dynamic and successful. However, there is more to a successful enterprise than just low taxation -- location, barriers to entry and diversification, comparative and competitive advantages, come first and foremost for a successful enterprise.
More importantly, inequitable or no taxation, can be more destructive than high taxation. For political reasons, the need to keep such high-end entitlements incentivises corruption. Also, with regard to adequate funding for social programmes, people wishing to engage in such specialised enterprises face high entry costs that the consumer and subsequently the state ultimately must pay for.
Those additional barriers,decrease the tax base as persons begin to spend more of their disposable income in an effort to obtain the training and skills necessary to compete in and for what the marketplace offers, in addition to the high cost of private investment into such specialised enterprises.
What makes it worse is if the perception of risk through sacrifice made by individuals does not facilitate for the full cycle completion on endeavours. Or, the high cost for entry is private market based (cost for capital investment and cost for private education), where the government does not have a progressive, optimal tax mix and that tax mix model is not synergised to assist with the equitable development of the industry at all levels.
When such market failures occur, the government must spend on socio-economic policies that develop infrastructure and human capital.
Through all of this, I must state that the issues are more complex than just taxation. We need more bang for the buck and a re-engineering of our socio-economic programmes, in addition to doing more with respect to meaningful tax and spend policies that encourage economic growth, as well as lowering the private and public entry barriers to enterprise and skills training.
Before we begin the discussions on what forms of taxation we should have -- VAT, excise taxes, etc... -- or what types of spending we must endeavour, we must begin to frame the minds of citizens and add to the conversation of what the economic importance of tax and spending reform is and what that means to us all, as I hoped this article addressed.
April 19, 2010
caribbeannetnews
I was listening to the news just recently, where Prime Minister Hubert Ingraham, who also is the Minister of Finance, said something to the effect that he would not lean against anyone broaching the issue of taxing the illegal numbers racket in The Bahamas, by virtue of taxing the internet cafés that are reportedly "fronts" for internet gambling businesses.
However, I'm not quite sure how easy it is to tax the numbers racket through internet cafés in The Bahamas. For starters, you have to have them recognize that they are, in fact, running illegal gambling out of internet cafés -- considering that the authorities have not been able to produce solid evidence in order to prosecute anyone allegedly gambling in these establishments. Secondly, what about the internet cafés that are legitimate internet cafés? Can't tax them... can you? Lastly, if I am running an illegal gambling racket through an internet café, then why would I want to pay taxes to the government for something I have been getting away with for so long?
Even if you put the work out for companies to bid on a national lottery, you still would be left at square one with the internet cafés that run the numbers racket and their subsequent prosecution.
It is no easy task and good luck to the persons tasked with sorting it out.
More importantly, however, if we have come to a point where we are speaking in open forum about taxing the numbers racket, seriously, it signifies that the government feels that The Bahamas is at a juncture where it needs meaningful tax reform for government revenue; the government, clearly, is not generating enough internal revenue in order to meet its obligations now; and that the prospects of meeting the debt service, is very bleak with the current system of taxation.
To be very blunt: the government has to tax. However, the term "tax reform” isn't necessarily supposed to have a negative connotation or stand for a pejorative slight of hand.
The word "tax", does evoke personal sentiments for obvious reasons and the word "reform" -- especially used by politicians -- is a code word of sorts for the refocusing of entitlements and simultaneously as a buzz word for business persons, which signifies more and unnecessary regulation. Which to business people means more time away from their business and more time dealing with a governmental agency with mentally challenged employees.
To be fair, government employees aren't mentally challenged -- although some who look like they shouldn't be makes one wonder -- and everyone doesn't understand what reform signifies -- either which way -- and no one wants to pay more taxes.
The truth is, however, The Bahamas government is in debt to over 40 percent of GDP -- with a widening deficit. Another clear fact is that The Bahamas doesn't have any streams of government revenue, other than from import taxes (where it gets over 50% of its revenue), National Insurance contributions, revenue from public corporations and government agencies and also through forms of public service charges and real estate; i.e., vehicle registration and real property tax.
Conversely, the Bahamas's tax to GDP ratio is about 18 percent. Which isn't that bad, considering Barbados, Jamaica and Trinidad is at 32, 27 and 38 percent respectively. But, The Bahamas isn't just like any other Caribbean country -- we do things a little different.
Firstly, we don't produce many agricultural products for mass consumption in The Bahamas, neither do we have a large export sector in terms of people involved in exports, away from the concentrated profits some firms make.
Another concern that compounds the lack of efficient and beneficial dynamism in the market place as it relates to an optimal and targeted tax mix is the reliance of import tariffs for government revenue.
While The Bahamas does not produce over 80% of what it consumes, and with the tax system as basic as it is, it has to tax imports heavily. As a consequence, this puts consumers and more importantly, low income consumer, at a disadvantage as the tax burden is disproportionate to what they spend on taxes in relation to what larger corporations and high income earners pay. For example, a 50 percent flat tax on all consumer goods means more to someone who makes $20k per year than someone who makes $100k per year and a flat rate for business licenses, means more to the small business person than it does for a large corporation.
Moreover, large industries such as banking and shipping, are virtually untouched as it relates to taxation -- no capital gains or corporate tax. Even the export of fisheries products is untouched as they relate to export taxes.
Some may argue that these low taxes are the reason why these industries are so dynamic and successful. However, there is more to a successful enterprise than just low taxation -- location, barriers to entry and diversification, comparative and competitive advantages, come first and foremost for a successful enterprise.
More importantly, inequitable or no taxation, can be more destructive than high taxation. For political reasons, the need to keep such high-end entitlements incentivises corruption. Also, with regard to adequate funding for social programmes, people wishing to engage in such specialised enterprises face high entry costs that the consumer and subsequently the state ultimately must pay for.
Those additional barriers,decrease the tax base as persons begin to spend more of their disposable income in an effort to obtain the training and skills necessary to compete in and for what the marketplace offers, in addition to the high cost of private investment into such specialised enterprises.
What makes it worse is if the perception of risk through sacrifice made by individuals does not facilitate for the full cycle completion on endeavours. Or, the high cost for entry is private market based (cost for capital investment and cost for private education), where the government does not have a progressive, optimal tax mix and that tax mix model is not synergised to assist with the equitable development of the industry at all levels.
When such market failures occur, the government must spend on socio-economic policies that develop infrastructure and human capital.
Through all of this, I must state that the issues are more complex than just taxation. We need more bang for the buck and a re-engineering of our socio-economic programmes, in addition to doing more with respect to meaningful tax and spend policies that encourage economic growth, as well as lowering the private and public entry barriers to enterprise and skills training.
Before we begin the discussions on what forms of taxation we should have -- VAT, excise taxes, etc... -- or what types of spending we must endeavour, we must begin to frame the minds of citizens and add to the conversation of what the economic importance of tax and spending reform is and what that means to us all, as I hoped this article addressed.
April 19, 2010
caribbeannetnews
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