The Japanese government is considering withholding taxes on winnings by non-resident foreigners at the country’s nascent casino industry, according to a proposal by the Ministry of Finance. The information was reported by Kyodo news agency – quoting sources close to the matter – and confirmed by GGRAsia’s Japan correspondent.
According to the draft proposal, casino operators would be required to record all respective play history for both Japanese citizens and resident foreigners, with their winnings taxed as “temporary income”.
The Kyodo report did not mention what the tax rate would for be for locals and for non-resident foreigners.
The news agency said additionally that the Japanese government was also considering making it compulsory for casino operators to keep records of chip purchases and win-loss results for each player.
Under the system, winnings at casinos would be taxed in a similar fashion to horse racing. A tax would be levied on the difference between the value of the chips purchased and the amount of those converted back into cash, reported the media outlet.
The national government has said a maximum of three integrated resorts or “IRs” – as large-scale casino complexes are known in Japan – will be permitted in the first round of liberalisation.
Under a proposal from the national government, Japan’s basic policy on the IR question would – once fully formulated and published – allow eligible places, namely prefectures or ordinance-designated cities, to submit an IR plan for the first phase of market liberalisation, and make an application to the government in the period January 4 to July 30, 2021.
According to GGRAsia’s Japan correspondent, the proposal on casino taxes is to be included in the outline of the tax reforms for fiscal year 2020, in order to be implemented under tax system reforms in fiscal year 2021.
The Kyodo news agency quoted an unidentified government official as saying that a tax framework has to be decided “in advance”, taking into consideration “the investment decisions of [casino] operators”.
Several international casino operators have indicated their interest in investing in Japan, with a number of prefectures and ordinance-level cities keen in hosting an IR.
On Friday, the governor of Hokkaido prefecture said his administration would not pursue the opportunity of a casino resort in the first round of market liberalisation in the country.
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”Galaxy Entertainment Group will resume limited operation of its casinos and VIP rooms from midnight on February 20, and will gradually resume full service based on guest demand”
Senior vice president of public relations at Macau casino operator Galaxy Entertainment Group