Casino Tax May Raise in Mexico
Author:
Muhammad Gregory
In the Mexican state of Nuevo León, administrators are considering a raise in taxes for all casinos in the area. The plan is to increase taxes to 15% in the new year. Though the change has not been approved yet, a plan has been submitted for consideration by local authorities. This follows a trend throughout Latin American countries to either adjust how tax is calculated and collected, or newly regulate gaming verticals in order to reap the tax benefits for the state.
One of Mexico’s states considers an increase in casino taxation in 2023. Jezael Melgoza/Unsplash
Tax raise in Nuevo León: What has happened so far?
As of now, the state government of Nuevo León — a state in the northeast of Mexico with a population of about 5.7 million people — has submitted its plan to increase casino tax from 10% to 15%. The change is in the form of a bill which must then go through the regular legal process for the state, including debate in congress and possible amendments before it comes into effect.
The proposal is part of a larger fiscal package created by the state government of Nuevo León. Its aim is to get approval and start implementation in 2023. This would require a change to the current Article 11, which deals with gaming tax rates. The package also addresses a tax on transport companies, which would be increased as well if the bill is approved.
The overall aim is of course to bring in more income to Nuevo León for various public projects. Tax changes are already happening in the state; for example, taxation of alcohol will also be increased by a whopping 383% soon, as reported by local news outlet Milenio.
Nuevo León reported on recent casino tax income. According to its last report, the state received revenue of $26.4 million USD in the first half of 2022. That constitutes an improvement on pre-pandemic tax levels. Governments and companies have been checking 2022’s income against 2019’s income in an attempt to show not only recovery from Covid-19’s impacts on the economy, but also overall growth, so the report was a positive sign for Nuevo León.
The report also shared that other betting houses brought in $18.2 million USD for the state treasury. That was an increase when compared to the same period in 2021. The improvement happened despite a new, lower tax rate applied to slot machines. The change came about due to pressure from slot machine operators earlier this year.
Mexico gaming industry: Coming back from Covid-19
Mexico was hit hard by Covid-19 and, in some ways, experienced its effects for a prolonged period. The effect on its gaming industry was obvious. Many casinos and gaming establishments were forced to shut for months on end. Some reopened only to be shut down again as infection rates skyrocketed in 2021.
Overall, the country has addressed the issue state by state, giving the green light to casinos to increase their capacity gradually until it was safe to open doors to full capacity again. Pandemic closures of course badly affected the industry, as well as tax revenues collected by the government, so attempts to increase them may also be a direct response to coping with those fallow periods.
