According to a performance audit, the Government of Guam missed out to collect limited gaming taxes amounting to $2.6 million in the period from 2014 to 2017. Now, the Department of Revenue and Taxation and the Office of Public Accountability are trying to find a solution to getting the uncollected money.
The above-mentioned audit regarding the gaming tax received from five lottery and bingo operations in the period from October 1st, 2013 and September 30th, 2017, revealed that the island country’s Government lost the chance to collect tax proceeds estimated to over $655,000 from each of the five leading non-profit organizations, or an overall amount of $2,620,951.
The report includes a number of findings, with them resulting in four recommendations for Rev and Tax, all of which were accepted by Dafne Simizu, the Acting Director.
According to the findings, gaming winnings are reported to Rev and Tax by non-profit organizations but no information regarding individual taxpayers and their winnings is available. Also, local non-profit organizations were found to may under-report bingo gross receipts. At the same time, bingo activities provided at centres for elderly citizens are exempt from paying the tax. The audit also found that the definition of the term “gross receipts” in the Guan Code Annotated is not consistent with the one in the Guam Administrative Rules and Regulations. In addition, the Rev and Tax failed to process on time form 3260s, which local non-profit organizations file to report their monthly returns.
Recommendation Made to Rev and Tax for Timely Form 3260s Processing
Currently, a 4% tax is imposed on certain gaming activities offered by non-profit organizations in Guam under the Guam Code Annotated. However, so-called “gross receipts” are described as the amount calculated after the winnings paid out by non-profit organizations are subtracted from the total gaming revenue. This is the definition used by Rev and Tax, as well as by the non-profit organizations that file Form 3260.
The Office of Public Accountability has made a recommendation to the Rev and Tax saying that it should consider to bringing changes to the definition regarding payments for winnings. The Acting Director Ms. Shimizu accepted the findings but also said that she intends to not take further measure on the issue until she sees the result of of the litigation on rules and regulations which is still taking place.
According to the results of the audit, Form 3260s which was filed from December 2017 to December 2018 had not been processed as of January 2019. The authors of the report cited that there were not enough designated staff members to ensure timely processing as the reason for the pile-up of the unfinished business at the Government agency.
The auditor also issued a recommendation for the Rev and Tax to consider the addition of electronic options for filing the limited gaming tax forms. The report’s authors also said that it would be a good idea for the agency to ensure that there are enough staff members to process the filing and accurate gaming tax payment.