Owners hit 400% rise in gaming tax, warn: Bars face closure

GAME OF CHANCE: A man places bets on an electronic roulette machine at a bar in Tunapuna in July. Govt is set to increase the tax on gaming machines from $6,000 a year to $25,000 a year per machine. - File photo

THE TT Coalition of Bars and Restaurants (TTCOBAR) and the Barkeepers Owners/Operators Association of TT (BOATT) are urging bar owners to contact their MPs, especially those in government, over a proposed Amusement Gaming Tax increase which, if implemented, could devastate the country’s liming sector.

Both associations have described the proposed 400 per cent increase in the tax on gaming machines as a “second pandemic,” and one that is potentially more damaging to small and medium-sized bars than when covid hit the country.

The government has proposed raising the Amusement Gaming Tax from $6,000 to $25,000 per machine per year, representing an increase of more than 400 per cent.

Both TTCOBAR and BOATT have argued such a measure could render legal operations financially unviable for hundreds of community-based bars that rely on gaming revenue to sustain their businesses and pay staff.

BOATT president Satesh Moonessar told Newsday on December 4, via phone, that the proposed tax hike could cripple bars nationwide, triggering permanent closures and job losses.

“With the raised taxes, this could be a second crisis, potentially even more detrimental than the pandemic, as it could force permanent closures and shrink the industry,” Moonessar warned.

Earlier on Thursday, both organisations issued a joint release warning the measure could have catastrophic consequences for small and medium-sized bar enterprises that depend on regulated gaming revenue.

“The policy amounts to a direct shutdown of small and medium-sized bar enterprises that depend on regulated gaming revenue to survive,” the statement said.

Moonessar revealed both associations met with government officials “a few weeks prior” to discuss possible reductions in gaming taxes and the option for quarterly payments.

“We were under the assumption these requests were being considered, not realising this was apparently an issue already decided,” he said. BOATT represents approximately 450 of the roughly 2,500 bars nationwide. Moonessar warned at least half of these bars could be affected, either through closures or the inability to operate gaming machines.

“If bars don’t close, they won’t be able to operate certain machines, which means bars that survive without these machines will have to function as self-run operations. I really don’t see the feasibility of paying these taxes,” he said.

According to the joint release, for a “modest bar” operating ten gaming machines, the annual tax liability would jump from $60,000 to $250,000 – a $190,000 increase, which often exceeds the net profit of many small and medium-sized establishments.

Moonessar discussed the potential economic impact, saying, “The immediate concern is lay-offs, but the broader economic panic may differ.” He stressed the importance of dialogue, saying consultation before final parliamentary approval is essential.

“The best way forward would have been consultation. That is the only way to move forward in situations like this,” Moonessar said. He said determining a fair tax rate would require careful consideration, as each bar operates under unique circumstances.

Don't raise the tax, strengthen compliance

A TTCOBAR representative, who also spoke to Newsday the same day, elaborated on both organisations’ meeting with government officials. He said discussion focused on gaming taxes and how the proposed increase would affect bars.

“Our main focus was requesting a decrease in taxes and ensuring greater compliance,” the TTCOBAR representative said.

“Government’s concern is the low compliance rate among bar operators when it comes to paying their gaming taxes. Our organisation supports enforcing the law. Recently, the government began regular enforcement, and as a responsible association, we’ve been encouraging our members to comply.”

A police media release on October 31, highlighted a joint bar exercise in the St Joseph district on October 30. It noted the exercise resulted in several fines for licensed premises found in breach of the Gambling Act.

One establishment was ordered to pay $156,000 in taxes for six wall-mounted machines, another $192,000 for 12 wall-mounted machines and a roulette device, a third $48,000, and a fourth $336,000 for nine wall-mounted machines and one roulette device under a member club license.

The TTCOBAR representative said while government expressed support for enforcement against illegal operators, it also needed to ensure bar owners could comply financially.

“We suggested lowering the tax rate and allowing quarterly payments. This would reduce the financial burden on bar owners. At the moment, they have to pay a significant amount upfront,” he said.

He said both organisations have not only requested a decrease in the tax rate and the option to pay quarterly but also expressed support for enforcement against non-compliant operators.

“As good corporate citizens, we need to pay our fair share and operate within the legal framework,” he said.

However, the rep said instead of considering a decrease, the Finance Act proposes a 400 per cent increase, from $6,000 to $25,000 per machine. “This is no small adjustment; it is extreme.”

The representative estimated that of the country’s bars, about 60 per cent rely on gaming machines. Revenue from these machines helps offset operational costs, including electricity, wages, security, and losses caused by reduced sales in the face of recent increases in the price of beers, rum and cigarettes.

He insisted without the added income (of gaming machines) small and medium-sized bars may not survive.

“Gaming revenue essentially subsidises these expenses. The government wants to collect revenue, but setting such a high figure will discourage bars from having machines.”

Fight for survival

Asked whether small and medium bar owners would be able to retain staff under the new tax, he said no.

“Bar owners will need to cut costs. For most, paying $25,000 per machine simply won’t make sense. The government’s intention would backfire: they would see fewer registered machines, less tax revenue, and increased illegal gaming.”

He stressed closures would have a ripple effect beyond gaming taxes.

The TTCOBAR rep said bars contribute other taxes, including corporate tax, PAYE, licensing fees, and VAT. He said if small bars close, neighbourhood bars in rural communities, family-owned businesses, and workers earning minimum wage, many from single-income households, will be hit the hardest.

“We’re calling for dialogue on a reasonable tax rate. If the government wants to raise it, fine, but how do you justify a 400 per cent increase? This is extreme.”

The joint release noted gaming revenue often pays workers’ salaries, covers utilities, and keeps bars operational amid rising food, labour, and operating costs.

It said immediate consequences of the proposed increase would include closures, retrenchments, and the loss of VAT, NIS, PAYE, liquor licence fees, and corporation tax revenue, as well as a rapid expansion of illegal and unregulated gaming activity.

The rep concluded: “We encourage all bar owners to contact their MPs, especially those in government, to make them aware. We’re fighting for our survival.”

The associations emphasized its position is not about defending gaming machines but about defending jobs, public businesses, and the community's survival.