Cambodia-based NagaCorp says it expects Cambodia to pass a gaming law in 2016 that will likely include a tax provision and possibly a gaming tax.
According to Nagacorp chairman Timothy McNally,Cambodia is likely to approve and pass a gambling bill in Y16Q4. It is currently in drafting stage. The company said in its view any tax increase should be moderate as it is important to maintain a competitive edge for the Cambodian gaming sector.
Nagacorp had previously estimated its tax bill in 2015 would amount to about 2 percent of its revenue. McNally said the company will continue to pursue its business development plans in the region, even with the higher tax, such as NagaCity Walk, scheduled for launch in Aug. 2016.
In related news, the government is reportedly aiming to draw in investors from Macau and the United States after the new legislation is passed this year, according to a senior official from the Ministry of Finance in Cambodia quoted by local media.
“When the law is enacted, we will not only be able to double revenue from the industry but also open the market to direct investment from major investors,” said Ros Phearun, deputy director general of the ministry’s finance industry department. Phearun added that investors had been deterred from directly investing in casinos due to lack of appropriate legislation in the past.
“[The legislation] is not only good for tax revenue but also to attract more foreign visitors,” he said.
Phearun says the government aims to attract more Chinese tourists to the Kingdom, and has drafted a new five-year plan, to begin this year.
Phearun says the government will not raise taxes on the industry.
“We had planned to get approval from the National Assembly in the first half of the year, but we have seen a bit of a delay, so now I hope it will be approved by the end of the year and the tax rate will stay the same as what we impose now,” Phearun said.
According to Union Gaming analysts based on recent commentary from government officials, there is reason to believe GGR tax will be no more than 5 percent, which won’t be implemented until next year at the earliest. At a 4 percent GGR tax, the result would be a 6 percent hit to net income.