Imp Pacific might face 10pct net gaming rev tax: report
Commonwealth of the Northern Mariana Islands (CNMI) House Representative Tina Sablan has introduced a bill which would impose a 10 percent tax on net gambling revenue there, according to a report carrying Monday’s dateline in the Marianas Variety newspaper.
Should the measure be passed, it would as matters stand, be applicable to the operations of Saipan’s monopoly casino business (pictured) promoted by Imperial Pacific International (CNMI) LLC, a subsidiary of Hong Kong-listed gaming investor Imperial Pacific International Holdings Ltd.
The news report also quoted House minority leader Edwin Propst, co-sponsor of Ms Sablan’s measure – House Local Bill 21-23, – as saying “it’s important that we do it”. He described the tax proposal as “actually very kind” since it would be imposed on net gaming revenue and not on gross gaming revenue (GGR). The measure is also said to be deductible against the annual US$15 million casino licence fee payable by the Imperial Pacific group.
In the Macau market – by comparison – there is an effective 39 percent tax on GGR, and operators must also pay a premium to the local government to operate each mass-market and VIP gambling table. Macau operators are also exempted from local corporate income tax.
CNMI lawmaker Mr Propst said that while in his view the proposed CNMI bill on net gaming tax was fair, “the urgency is that Imperial Pacific International (CNMI) LLC has not paid any taxes within almost a year.” he added. The report did not clarify to what form of tax Mr Propst was referring.
The 2018 annual report of that firm’s Hong Kong parent indicated – in the section regarding cost of doing business – that it had a deduction for HKD292.41 million (US$37.3 million) in taxation on its balance sheet as of December 31.
The Marianas Variety additionally reported on Monday another bill has been drafted by House Gaming Committee chairman Ralph Yumul to prevent the casino operator from writing off from its tax obligations any amount of credit advanced to players for gambling but not subsquently back by them. Such tax allowances are permitted in some casino jurisdictions. But the CNMI supplementary bill emphasised that “unpaid balances on loans extended for gambling shall not be deducted from gross revenues”.
In February this year, the Saipan Tribune newspaper quoted the Imperial Pacific group as saying building work on the “initial gaming facility” on Saipan would be completed in 2019, although fewer than 300 construction workers were employed on the site.
The 2018 annual report of Imperial Pacific International Holdings noted that – as of end-2018 – “approximately US$792 million” had been invested by Imperial Pacific in “design, consulting, engineering, construction material and labour” for its Saipan property.
According to Marianas Variety, the Imperial Pacific group was reported to have paid US$41,000 in what the news outlet termed business gross revenue tax since July 1, 2018 compared to US$40.9 million in 2016, US$67.7 million in 2017 and US$43.6 million in 2018.
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