Philippine casinos face end of tax holiday

Philippine casinos face end of tax holiday

Casinos in the Philippines’ Entertainment City gaming zone are bracing for the abrupt end of their tax holiday.

Philippine casinos face end of tax holidayOn Thursday, Andrea Domingo, who heads the Philippine Amusement and Gaming Corp (PAGCOR), announced plans to revoke the temporary tax breaks it offered the four brick-and-mortar casino operators in Manila’s Entertainment City back in 2014.

Domingo told the Manila Bulletin that PAGCOR was “preparing the necessary correspondence” to alert the casino operators that the current tax rate of 5% of VIP table game revenue would be reverting to its original rate of 15%, while mass market tables, electronic gaming and slots would climb from their current 15% to the original 25%.

The reductions were originally introduced as a way to compensate operators for the Bureau of Internal Revenue’s surprise decision to impose a 30% income tax on the Entertainment City resorts, rather than the 5% franchise tax operators had been told to expect.

The reversion to the old regime will require approval by PAGCOR’s current board of directors, but Domingo said she planned to impose the original rates “as soon as we can.”

Domingo stressed that the tax breaks were always intended to be temporary, but it’s hard not to draw a straight line between their revocation and the tens of millions of dollars that the state-run PAGCOR stands to lose following the scrapping of its lucrative eGames café business. So it appears casino operators are basically paying the price for President Rodrigo Duterte’s anti-online gambling campaign.

Only two of the planned four Entertainment City operators are currently open for business: Bloomberry Resorts’ Solaire Resort & Casino and Melco Crown Entertainment’s City of Dreams Manila. Japanese billionaire Kazuo Okada’s Okada Manila is set to open its first phase this November, while Travellers Interational’s West Side City Resorts World won’t follow until late 2020.