Cambodia Sets Casino Tax Plan in Motion with the New Year
Posted on: January 10, 2023, 01:07h.
Last updated on: January 10, 2023, 01:50h.
In November 2020, Cambodian lawmakers approved a plan to change how casinos paid their taxes in an effort to deliver more money to the state. That plan is now in motion. But whether it works or not depends on the operators’ willingness to participate.
Previously, casinos in the country paid a flat rate on their revenue. The goal of the change, according to the government, was to provide more transparency and clarity in gross gaming revenue (GGR).
Now, as of the beginning of the year, Cambodia will calculate tax percentages using a sliding scale based on how much the casinos earn. For this to be viable, operators will have to first present financial declarations using actual data.
Casinos Earn Too Much Money
Cambodia’s gaming industry is dealing with an identity crisis that has emerged from the arrival of more than a few unscrupulous people. mostly Chinese gangs. They seem willing to do whatever it takes to make money, even if it means using torture, kidnappings, and slave labor.
As a result, the government has initiated a crackdown, determined to get rid of the bad element. However, that requires a financial commitment, and the casino industry, which includes operations like NagaWorld, is going to help pay for it.
Casinos that operate within integrated resorts (IR) will pay 4% of the income from their VIP operations. They will also have to give up 7% of their income from mass market gaming.
Everything outside of the IRs will pay 7% of their income. For tax reporting purposes, income is everything the property makes off gambling after deducting the money gamblers win on the gaming floors.
The Ministry of Economy and Finance, according to The Khmer Times, sees this as a positive move forward. It will give the government greater accountability of its gaming operations, as well as improve transparency on the part of operators.
NagaWorld has rallied for the change. Its tax bill from 2019, according to its own financial statement, was around $30.4 million, which amounted to an effective tax rate of 5.5%.
Now, casinos could decide to only work with VIPs. Alternatively, they could find ways to be creative with the clientele’s classifications.
Regardless of the casinos’ approach, the Cambodian government has made its position clear. Casinos must pay their full tax liabilities on time and in full if they don’t want to face the possibility of permanent closure.
A Casino By Any Other Name
Cambodia is going to introduce a handful of other changes to its gaming industry over the next few years. One of the big ones is the requirement that operators had to apply for a new license or renew their current licenses last year.
In addition, Cambodia is developing three “gaming zones” in the country. One zone prohibits all gambling within its boundaries, and the second covers areas that already have legalized, licensed operators.
The third type covers “favored zones,” where the government wants new growth. This includes the provinces of Sihanouk and Koh Kong.
Sihanouk, home of Sihanoukville and its crime wave, has been trying to clean up its image. However, many criminals once active there have been relocating to Koh Kong, according to local media reports.
Another change Cambodia is implementing centers on marketing. Casinos are no longer going to be called casinos. Instead, they’re going to be “commercial gambling” properties.
The government wants all casinos to change their branding on signage and customer-facing media. It feels this will better present them as entertainment centers, not gambling hubs. However, changing a name doesn’t change what it is.
Related News Articles
Source: casino.org
