New tax system in Singapore to benefit casino operators

New tax system in Singapore to benefit casino operators

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.

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