For almost two months, we have witnessed in Peru a very particular situation in relation to taxes collected by casinos and gambling halls, as well as a gray debate about the negative social effects that this activity would generate in our society.

We have witnessed descriptions, let's say interesting, about the tax burden, the control of gambling and money laundering, with figures for which no sustenance or trustworthy origin has been given, and trying to apply concepts that due to their nature they are alien.

All this has been supported by an important media machinery, organized in such a way that it leaves a lot of space to think about if it is a matter really thought about and evaluated.

For example, it was spoken for a long time and in different orbs, that our activity was exempt from the payment of the VAT, generating an injury of hundreds of millions of soles to the Public Treasury. This does not make any sense because such tax is not applicable to us, in accordance with the General Sales Tax Law itself. But even so, more than one Congressman intended that such a tax be applicable and even presented bills (in the plural) for this purpose.

The question is logical and simple; How can a Congressman ignore the application framework of the Law itself and claim the unconstitutional application of a tax?

On the other hand, we were expressed as a triggering activity of gambling, generating a growth rate of 30% per year and affecting a significant percentage of the population. When the defenders of this thesis were questioned about the origin of their information, there was never an answer. This made it clear that what was intended was to support the fact that our activity generates negative effects on society, with the consequent economic burden on public budgets for the treatment of those affected.

In this last exhibition, important issues are overlooked, such as the definition of pathological gambling itself, in addition to the data source. Intentionally, the compulsion in the use of smartphones, tablets, consoles, as well as other activities related to gambling, such as lotteries and sports betting, is left out of the analysis, falling into the oversimplification of the outdated stigmatization that casinos and theaters of play are synonymous with centers of vice. Few things can be further from reality.

While all this organized attack took place, the current national scenario was underestimated, of being one of the most regulated industries in Latin America, of being an activity with a high degree of formalization, that neither mining nor fishing, to name two cases, they have. The entire control apparatus and the resources used for it were left to be seen, while the society continued to be misinformed, seeking media pressure.

This pressure finally received its fruits when the Ministry of Economy and Finance (MEF) and the Superintendence of Tax Administration (SUNAT) were entrusted with the taxation of an ISC (Selective Consumption Tax, applicable to luxury goods), to casinos and slot machines. It is there, too, where it became evident that neither of them had carried out an effective control and inspection, either due to lack of resources, knowledge or both. But the fact is that the information collected has led to a wrong conclusion of the reality of the industry in Peru, which certainly cannot be blamed as a one-sided responsibility.

In effect, this is a story where we have all written a chapter; lack of capacity to communicate to society who we are and what we do, lack of rationality of the State to understand that we are an industry like any other (and better than many, including, without consuming natural resources or pollute), lack of Public Administrators to control and understand our business and, of course, my fault for not collaborating with information and timely data.

This ISC created by the MEF is more like an asset tax than an ISC. Each machine is taxed by its average net win of the month, regardless of whether it was negative or if the accumulated total of the month is less than the applicable tax amount. Then the income is no longer taxed but the slots are, that is, the asset. There is no room for second interpretations, since the State secures an income even if the operator, for that machine, has not generated the income to pay for it.

The reasoning seems to be that the utility of another machine should be used to cover that deficit. This amounts to saying that we use our savings to pay a minimum income tax, even if we do not have work and, therefore, earnings.

On the other hand, scales have been set based on the Tax Unit (UIT because of their Spanish name, equivalent to just over USD 1300) that do not seem to have much logic either. For example, if a machine produces up to USD 150, it pays 6% of the UIT. But if it produces more than USD 150 (for example, USD 151), it pays 27% of the ITU. That is to say, to earn USD 1 more than average in the month (USD 30 per month), I have to pay 21% more than the UIT, which is equivalent to something more than USD 273. That is, those extra 30 dollars, they cost me 243 Dollars. What is the logic then?

I insist on my thesis that the MEF is not directly responsible. In a short period of time and without data or resources, the task of taxing the industry with a tax that assures the Public Treasury an important income has been entrusted to them in an irrevocable manner. It does not matter that the conceptualization of the tribute is oriented, for example, to thinking that the whole operation is made up of super markets, when in reality there are many convenience stores (neighborhood tobaccos, to clarify one way), and some supermarkets. That is the size of the real market, it is our true situation.

We would all like the size of the business to be greater, but it is not. To think about raising double or 50% more at least just because it is needed, is not a reason or sufficient reason to apply a tax.

Recall that currently the annual collection for tax gaming (which is also an ISC in concept), reaches 100 million dollars. Of that amount, only 15% go to the Treasury, so the State, in itself, does not benefit from our industry. But this is not our fault, the other 85% goes to the municipalities, the Peruvian Sports Institute and MINCETUR directly. Our tax burden is already quite high, we must turn to see other sectors that do not tax and raise there.

And as if there were coincidences, just 48 hours after the ISC was enacted for the casinos, there are two bills for the Regulation of Sports Betting and one to modify the Lottery Regulations.

Anyone wonders why this was not done before, especially when MINCETUR has been struggling for the regulation of sports betting and online gambling for months. It is also easy to question why these activities were not taxed with an ISC, together with the casinos.

I am in total capacity to ensure that this perfect timing for the presentation of the draft Sports Gambling Regulation Law took MEF as an absolute surprise and it has not fallen very well within it. It is clear that the situation lends itself to suspicion, but the responsibility largely exceeds its attributes.

In the same way, the draft Law of Modification of the Law of Lotteries was not of his knowledge either. Moreover, it has come as a surprise that its content once again circumscribes it to the Ministry of Women and Vulnerable Populations, does not oblige it to explicitly comply with regulations for the prevention of asset laundering and financing of terrorism, nor does it impose control mechanisms on them. gambling

So, who is the great beneficiary of all this almost perfect and miraculous seguidilla of media actions, social disinformation, increase of tax rates and therefore increase of the operation of games of casinos and slot machines, and now late regulation of sports betting and exclusion of lotteries from regular regimes that will control other recreational activities? It's an interesting question with a pretty obvious answer.

But still there is a window to create the equity that is required; the MEF is able to modify the rates via Supreme Decree, as well as to request the inclusion of other leisure activities, such as sports bets and lotteries, in the special regime of the ISC.

For its part, in the bills presented for the Regulation of Sports Betting, is the DGJCMT (General Directorate of Casino Games and Slot Machines) of the Competent Authority MINCETUR, so they will fall into the same regulatory environment as the casinos and slot machines, ensuring fairness in the operating conditions.

It will be necessary, then, that as a union we demand the Ministry of Women and Vulnerable Populations, the imposition of the same rules of the game to the Lottery, for what we hope, now, to have the leadership of our Regulator.

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* José Miguel Chueca, is an International Consultant and General Director of JMC Gaming Consultants, could be contacted at Cellphone: +51 9 97300330 and his page www.jmcgamingconsultants.net