Sri Lanka’s casino tax revenue slips through a hole in the budget
Sri Lanka’s casino operators will be hit by a triple blow with the massive increase in licensing fees, entry fees and taxation from the 2019 budget but tax experts and financial analysts say that the expected revenue would be leak through a hole in the budget,
The misleading/vague presentation in the budget where reduction in the levy is presented as an increase is then compounded by budget estimates that present the consequence of these reductions as revenue enhancing rather than revenue decreasing, they claimed.
The Inland Revenue Department (IRD) has failed to collect the taxes pertaining to Casino Entrance Levy and Levy on Gross Collection and therefore even implementing a reduced tax would result in an increase in revenue, if collected.
However, even so, the correct attribution of such a revenue increase would be to attribute it to measures that rectify the failure to collect taxes, and not to attribute it to a measure that reduces the tax, they added.
Revenue slippage under these circumstances would be around Rs.1.7 billion, financial analysts said.
The government has increased its annual licence fee for casinos to Rs.400 million from Rs.200 million.
There will also be a turnover tax of 15 per cent. The taxes came into effect from April 1. The casino entrance fee of US$50 per person will be introduced from June 1.
Analysts believe the entrance fee will affect casino revenues as it will discourage domestic players. Annual fees for rudjino games, a type of card game popular in Sri Lanka, have also been increased to Rs.1 million.
Colombo is a hot bed for casino gaming in Sri Lanka with popular casinos such as Bellagio Colombo, Bally’s, Casino Marina Colombo and Star Dust impacted by the new taxation, casino operators said.
According to the 2019 Budget there was an increase of the license fee of casinos to Rs. 400 million per annum from Rs. 200 million.