Pagcor’s plan to lower the license fees for its casino licensees took a step forward after all parties involved came to an agreement to temporarily reduce the fees by 10 percent of gross gaming revenues effective April 1, 2014.
The announcement was made in a joint statement issued by Pagcor to the Philippine Stock Exchange with the consent of Travellers International Hotel Group Inc., Bloomberry Resorts and Hotels Inc., MCE Leisure (Philippines) Corporation, and Tiger Resorts Leisure and Entertainment Inc., essentially cutting the fees for high roller tables and junket operations to five percent and for non-high roller tables, slot machines and electronic gaming machines to 15 percent.
The statement called the deal a “beneficial and practical solution” that should address the casinos’ “additional exposure to corporate income tax.” The country’s Bureau of Internal Revenue (BIR) unexpectedly slapped a 30-percent corporate tax on casino gambling last year.
The new agreement is only temporary and is subject to return to its original configuration – 10 percent fees on VIP tables and junket operators and 25 percent for slots, electronic gaming and mass market tables – if/when the BIR’s ruling is “restrained, corrected, or withdrawn.”
The statement insisted that the new agreement was in no way an admission of the validity of the BIR’s memorandum, as Pagcor and its licensees are still legally contesting the corporate tax hike.
Melco Crown Philippines chairman and president Clarence Chung released a separate statement, applauding the alternative action and standing firm on its commitment to develop City of Dreams Manila. “We welcome this initiative and express our sincerest gratitude to the Government of the Republic of the Philippines and PAGCOR for their continuous support in helping us realize our gaming, leisure and entertainment complex in Manila,” Chung said.
“The development of City of Dreams Manila is progressing well and we firmly believe our integrated leisure and entertainment destination resort will play a key role in furthering the ambitions of the Philippines in establishing the country as a major leisure and tourism destination in the region.”
