Maybank Investment Bank analysts say new property tax rebate likely to benefit both of the country’s IRs.
Singapore.- Local government has revealed its budget for 2020 and a new tax system to become effective on March 2022.
According to Samuel Yin Shao Yang, Associate Director of Research at Maybank Investment Bank, the new system will not have a material impact on the two integrated resorts in Singapore.
The annual tax rate on mass gross gaming revenue (GGR) will go from a flat rate of 15 percent to a rate of 18 percent for the first SGD3.1 billion (€2 billion) of GGR collected by casino operators.
Mass GGR in excess of SGD3.1 billion will be taxed at a rate of 22 percent, the government announced.
Singapore has two casino complexes: Resorts World Sentosa, operated by Resorts World at Sentosa Pte Ltd, a unit of Genting Singapore Ltd; and Marina Bay Sands, operated by Marina Bay Sands Pte Ltd, a subsidiary of United States-based Las Vegas Sands Corp.
Mr Yin noted that the 2020 budget included a 10 percent property tax rebate for integrated resorts. He added that the previously announced hike in the Goods and Services Tax (GST) to 9 percent from 7 percent would “be delayed from some time between 2021 and 2025 to some time between 2022 and 2025”.
Mr Yin said the property tax rebate was likely to translate into a cost saving of SGD3.8 million (€2.5 million) for Genting Singapore for full-year 2020. “This constitutes only 70 basis points of our full-year 2020 core net profit forecast of SGD539.1 million (€357 million),” the Maybank analyst stated.
The Maybank analyst said the institution was expecting the 50 percent casino entry levy hike announced in April last year “would be rolled back a tad” by the government, with an announcement to be made during the 2020 budget presentation, which eventually did not happen.
That was a reference to a 50 percent hike on the daily entrance tax Singaporean citizens and permanent residents need to pay to be allowed inside a local casino. The annual levy was also increased at the time, to SGD3,000 (€1900) from SGD2,000 (€1200).
“Hopefully there will be more aid and relief [measures for casino resorts] post-budget 2020,” Mr Yin added.