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Overview of The Macao Tax System
The tax system of Macao is basically derived from
Portugal. Amendments and improvements have been made
constantly on the tax regulations in order to let the tax
system adapt more closely to the Territory. As the tax
system of Macao is territorial in nature, all activities
of commercial or industrial nature which are being
conducted in the territory are taxable. |
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The tax system of Macao has an attractive characteristic of
the lowest tax rates as compared to other South East Asian
countries. In fact, as the Territory is still in the
developing stage, low tax rates are essential for attracting
foreign, as well as local investments. The main reason why
such low tax rate can be maintained is that direct and
indirect taxes are not the principle components of total
public revenue. High tax rates and as a result, large tax
revenues are what is often seen in other countries. But in
the case of Macao, the major source of public revenue comes
from revenues from franchises granted, which are actually
the rent, the complementary tax other revenues collected
from the gaming industry. With the gaming industry
supporting most of the Territory’s revenues, the tax burden
on local and foreign business and economic activities is
highly bearable due to the benefits derived from low tax
rate. As a result, the economy of Macao has been developing
at a remarkable speed. |
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