Following the Hong Kong Jockey Club's announcement that betting tax levels for the racing season just ended were at their lowest level for six years, analysts in the SAR have warned that the government's plan to balance the budget in five years may be in jeopardy.
According to HKJC figures, betting turnover for the season was down 4% on the previous year, coming in at around HK$78.1 billion.
Speaking to the South China Morning Post on Tuesday, tax experts suggested that the jurisdiction's betting industry has been battered by illegal offshore betting on the World Cup and a generally poor economic situation, and warned that as the sector contributes some 7-8% of government revenue, the shortfall is likely to impact on the SAR's financial position.
'At the moment, I suspect the picture is a bit bleak...unless there are huge investment gains or other one-off gains it will have an impact on the outlook for 2002/03,' PricewaterhouseCoopers Senior Tax Partner, Tim Lui Tim-Leung told the SCMP.
He added that if betting turnover (and by extension betting duty revenue) continue to fall when the racing season begins again in September, the Hong Kong government: 'will have to consider whether it has the ability to make Hong Kong fiscally break-even in its five year time frame.'
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