Philippines-based casino operator Bloomberry Resorts Corp says the country’s Supreme Court decided in the firm’s favour regarding a tax dispute with the Bureau of Internal Revenue.
Bloomberry is the owner and operator of the Solaire Resort and Casino (pictured) in Manila’s Entertainment City.
In April 2013, the tax bureau imposed corporate income tax at a rate of 30 percent on the private sector casino operators licensed by the country’s gaming regulator-cum-operator, the Philippine Amusement and Gaming Corp (Pagcor). Bloomberry in June 2014 filed a petition with the Philippines’ Supreme Court seeking to cancel the provision from the tax bureau.
“The Supreme Court granted the certiorari petition of Bloomberry Resorts and Hotels Inc (an indirect subsidiary of Bloomberry) against the imposition of corporate income tax by the Bureau of Internal Revenue on Bloomberry Resorts and Hotels as a licensed casino operator of Pagcor,” the firm stated in a Tuesday filing to the Philippine Stock Exchange.
It added: “This Supreme Court decision will allow Pagcor, and Bloomberry Resorts and Hotels as an integrated casino resort, to revert to the original licence fee structure of 15 percent and 25 percent licence fee (inclusive of the 5 percent franchise tax) for high rollers/junket and mass gaming respectively.”
Bloomberry had argued “that as [a] contracting party of Pagcor, it was subject only to the 5 percent franchise tax on its gross gaming revenue, in lieu of all taxes,” as provided in the Pagcor charter.
The Supreme Court decision was dated from August 10 but was only released on Monday, stated Bloomberry. According to the firm, the ruling “ordered the Bureau of Internal Revenue to cease and desist from imposing corporate income tax on income from gaming operations of casinos duly licensed by Pagcor.”
The BIR’s 2013 announcement was followed by behind-the-scenes negotiations to arrive at a compromise, with Pagcor eventually announcing in May 2014 that it was cutting taxes on VIP and mass gambling by 10 percentage points for its private sector franchisees. That was in lieu of the BIR’s corporate tax decision.
Pagcor’s new administration – appointed by Philippine President Rodrigo Duterte following his inauguration on June 30 – announced it would cancel the tax cut offered to casino operators by the previous Pagcor management. It added it would order the respective operators of four private sector casinos in Manila – three in Entertainment City, including Bloomberry’s Solaire, and one at Newport City next door to Manila International Airport – immediately to adhere to the original rate of licence fee payable.
In comments to GGRAsia, a spokesperson from Asian casino developer and operator Melco Crown Entertainment Ltd had said that the return of higher licence fees for gaming operators at Entertainment City in Manila would not affect the company in the near future. Melco Crown operates the City of Dreams Manila via its subsidiary Melco Crown (Philippines) Resorts Corp.
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Net profit posted by Asian casino developer Bloomberry Resorts in 2016