Bloomberry asks court to overturn tax hikes

    Bloomberry Resorts and Hotels has asked the Supreme Court to overturn a Bureau of Internal Revenue ruling that calls on casino companies to pay income taxes on top of the franchise tax they pay to the Philippine Amusement and Gaming Corp.
    The operator of Solaire Resorts filed a 29-page petition for review of the tax situation last week.
    The BIR claims that Pagcor’s income from operations and licensing of gambling firms is subject to corporate income tax, as are its licensees.
    Bloomberry is arguing that Pagcor’s charter exempts licensees from paying taxes.
    “The law exempts from taxes persons or entities contracting with PAGCOR in casino operations. In fact, it goes one step further by granting tax exempt status to persons dealing with PAGCOR in casino operations,” BRHI stated in its petition.
    It added that if Congress had intended to remove this tax break, it should have promulgated a law repealing those exemptions. BRHI said the tax bureau, in issuing the circular, overstepped its authority by ruling contrary to a law’s intent.
    Pagcor last month attempted to take the sting out of the tax hikes by reducing license fees for casino operators.
    Fees were cut by 10 percentage points of gross gaming revenues for operators at Entertainment City. The cuts are temporary.
    Analysts at Citi welcomed PAGCOR’s decision, saying the higher-than-expected reduction in fees will be a “net positive” to all operators, leading them to raise their forecast for 2015 earnings of Philippine gaming stocks by 3 to 7 percent and to lift target prices by 4 to 15 percent.