A Philippine court has ruled that a particular entity reported to be linked to casino junket operations in that country was not entitled to a refund on 30 percent corporate income tax paid at source, according to a Friday report in the Manila Bulletin.
The Court of Tax Appeals said the reason for turning down the refund request by Prime Investment Korea Inc was that junket operations were classified under Presidential Decree 1869 as a “related service”, not as regular gaming, stated the news outlet.
Prime Investment Korea is a subsidiary of Philippines-based Leisure and Resorts World Corp. The firm is engaged in junket operations at the Midas Hotel and Casino in the Philippine capital Manila, according to its parent company.
Prime Investment Korea recorded a year-on-year decline of PHP138.2 million (US$2.7 million) – or 14.8 percent – in gross gaming revenue in the three months to March 31, to PHP795.0 million, Leisure and Resorts World stated in first quarter 2019 results, published last month. The firm stated the decrease was related to a reduction in VIP turnover, to PHP22.0 billion in the first quarter of 2019 from PHP30.5 billion in the prior-year period.
It was not clear from the media report whether the court ruling had implications for other entities with casino junket-related business in the Philippines.
Prime Investment Korea had argued in its submission to the court that it had additionally been remitting 5 percent franchise tax, which it had understood to be in lieu of other taxes under the terms of that decree.
The news outlet cited the court as saying that franchise tax covered only earnings generated from regular casino operations.
The Manila Bulletin said records indicated the country’s Bureau of Internal Revenue collected PHP24.3 million from Prime Investment Korea out of what were termed its “earnings” of PHP394 million from junket operations in 2014.
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”I do not believe that this event [the collapse of a under-construction building in Sihanoukville] will slow down the issuance of [gaming] licences. Market forces will probably dictate the process as developers evaluate projected future demand for gaming in the region”
Senior partner at business consultancy Global Market Advisors