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Mar 16, 2013 (LBO) - A proposal to lift a series of taxes from casinos and impose only a five percent tax has drawn fire from Sri Lanka's main opposition, as basic goods including foods are taxed at much higher rates.
"Instead of a 12 percent valued added tax and 3 percent nation building tax they are introducing a 5.0 percent special levy," legislator Harsha de Silva from, the main opposition United National Party told reporters.
"Also they are removing all levies from entities that whose turnover is less than a million rupees a month."
Sri Lanka has a low tax to gross domestic product rate compared to Asian peers, party to due undermining the value added tax regime with many exemptions as interventionism and lobbying had became more intense in recent years.
Gaming Revenues
But analysts say gaming is a lucrative source of revenue for many countries with a properly constructed tax regime that can be competitive with rival destinations.
According to some estimates Macao gets as much as 65 percent of state revenues from gaming and Singapore 14 percent and the US 22 percent.
Available information suggests that Macao, now considered the world's gaming capital, has a series of taxes totaling 39 percent on gross gaming revenues and there is no income tax.
Singapore has a tax of 5 and 15 percent on gaming revenues depending on the type of player, a 6.5 goods and services tax (similar to VAT) and corporate tax at 17 percent.
Las Vegas has a casino tax of 7.75 percent on gross gaming revenues and corporate income tax at 35 percent.
"What is most disturbing is that they are also proposing to bring casinos under the Strategic Development Act," de Silva said.
"Usually what happens is that these people are given enormous tax benefits, in some cases as much as 25 years of tax free status."
Such firms get income tax holidays, relief from economic services charge, port and airport levy are usually removed, de Silva said. Duty relief is also given on imported goods.
De Silva said the two changes to Sri Lanka's betting and gaming laws and the strategic development law was part of a series of laws that were being rushed through parliament without giving adequate time for discussion, undermining the legislative process in the country.
He said time was needed to do research and debate changes to legislation.
De Silva said at a parliamentary consultative committee earlier in the week, the head of the inland revenue service confirmed that out of nine casinos operating in the country only five were registered.
Tax Equity
He said it was not known whether they paid existing gaming levies, value added or other taxes.
"So is this equitable tax policy of this country?" de Silva questioned. "When you charge 85 rupees on a kilo of canned fish, when you charge 28 rupees on a 100 rupee reload on a phone?"
This year Sri Lanka imposed value added tax on the retail trade.
Sri Lanka first started giving tax holiday in the late 1970s under an administration headed by the United National Party starting with foreign investors, instead of having a low and stable income tax regime for all businesses.
But over the last two years Sri Lanka's corporate income tax rates have been made more competitive with the rest of Asia.
But with rising interventionism and nationalism, the prices paid for basic foods when people eat and the cost of building materials for when people try to build a home are higher than what other Asians pay.
Critics say prices have risen mostly due to rigging of the customs duty regime fatten the profits of production lobbies playing the nationalist card as well as other special interest groups.
In addition to proposals such as lifting value added tax on casinos while imposing it on the retail trade, racing cars have been given tax concessions while raising taxes on small cars.
There is heavy import duty on ordinary shoes worn by school children but branded footwear are given tax concessions.
Ordinary homeless people were paying high taxes on building materials ranging from steel to toilets while luxury apartments hotels were getting tax free imports.
end of article - source LBO
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"Instead of a 12 percent valued added tax and 3 percent nation building tax they are introducing a 5.0 percent special levy," legislator Harsha de Silva from, the main opposition United National Party told reporters.
"Also they are removing all levies from entities that whose turnover is less than a million rupees a month."
Sri Lanka has a low tax to gross domestic product rate compared to Asian peers, party to due undermining the value added tax regime with many exemptions as interventionism and lobbying had became more intense in recent years.
Gaming Revenues
But analysts say gaming is a lucrative source of revenue for many countries with a properly constructed tax regime that can be competitive with rival destinations.
According to some estimates Macao gets as much as 65 percent of state revenues from gaming and Singapore 14 percent and the US 22 percent.
Available information suggests that Macao, now considered the world's gaming capital, has a series of taxes totaling 39 percent on gross gaming revenues and there is no income tax.
Singapore has a tax of 5 and 15 percent on gaming revenues depending on the type of player, a 6.5 goods and services tax (similar to VAT) and corporate tax at 17 percent.
Las Vegas has a casino tax of 7.75 percent on gross gaming revenues and corporate income tax at 35 percent.
"What is most disturbing is that they are also proposing to bring casinos under the Strategic Development Act," de Silva said.
"Usually what happens is that these people are given enormous tax benefits, in some cases as much as 25 years of tax free status."
Such firms get income tax holidays, relief from economic services charge, port and airport levy are usually removed, de Silva said. Duty relief is also given on imported goods.
De Silva said the two changes to Sri Lanka's betting and gaming laws and the strategic development law was part of a series of laws that were being rushed through parliament without giving adequate time for discussion, undermining the legislative process in the country.
He said time was needed to do research and debate changes to legislation.
De Silva said at a parliamentary consultative committee earlier in the week, the head of the inland revenue service confirmed that out of nine casinos operating in the country only five were registered.
Tax Equity
He said it was not known whether they paid existing gaming levies, value added or other taxes.
"So is this equitable tax policy of this country?" de Silva questioned. "When you charge 85 rupees on a kilo of canned fish, when you charge 28 rupees on a 100 rupee reload on a phone?"
This year Sri Lanka imposed value added tax on the retail trade.
Sri Lanka first started giving tax holiday in the late 1970s under an administration headed by the United National Party starting with foreign investors, instead of having a low and stable income tax regime for all businesses.
But over the last two years Sri Lanka's corporate income tax rates have been made more competitive with the rest of Asia.
But with rising interventionism and nationalism, the prices paid for basic foods when people eat and the cost of building materials for when people try to build a home are higher than what other Asians pay.
Critics say prices have risen mostly due to rigging of the customs duty regime fatten the profits of production lobbies playing the nationalist card as well as other special interest groups.
In addition to proposals such as lifting value added tax on casinos while imposing it on the retail trade, racing cars have been given tax concessions while raising taxes on small cars.
There is heavy import duty on ordinary shoes worn by school children but branded footwear are given tax concessions.
Ordinary homeless people were paying high taxes on building materials ranging from steel to toilets while luxury apartments hotels were getting tax free imports.
end of article - source LBO
Thinking of JKH (share price run), Casino Licence for Mega Project, Foreign Buying (or is it our own Kalu-Suddha's ?) ahead of all this.
