By Garwin Davis, Assistant News Editor
THE GOVERNMENT'S planned 15 per cent taxation on lottery winnings will come into effect today.
The tax, imposed by Dr. Omar Davies, Minister of Finance and Planning, after what he called a careful examination of the gaming sector, including rejection of a $500 million revenue advance proposal from lottery company Supreme Ventures Ltd., is expected to bring in an additional $200 million to Government coffers.
"We are expecting a fallout for sure," said Paul Hoo, CEO and president of Supreme Ventures. "The question is how much of a fallout there will be and that we have to wait and see. Talk to me in another two or three weeks and we will better be able to assess the situation."
The Jamaica Lottery Co., also, is expecting a fallout. "It's pretty much a wait and see," Howard Mitchell, chairman of the JLC, said last week. "We still don't feel this tax is the right way to go."
The Government had initially suggested a 25 per cent tax on all lottery sales to help fill a budget-financing gap. Following outcry from the sector, however, this was then adjusted downward. Dr. Davies then shifted the tax to the winnings.
Mr. Hoo, in a presentation to a parliamentary committee, proposed paying the Government $500 million up front if it abandoned the tax on winnings. Dr. Davies later turned down the proposal, stating that "this would require making commitments for the future which, in terms of tax matters, is not a possibility."