GGRAsia – Vietnam casino zone tax incentives under attack: report

Vietnam casino zone tax incentives under attack: report

May 23, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

A draft law on Vietnam special economic zones – including places earmarked for some large-scale casino resorts – is due to be discussed from today (Wednesday) at the country’s National Assembly (pictured), according to VnExpress.

The same news outlet said the country’s lawmakers were simultaneously considering a proposal to reduce tax incentives for casinos and other gaming ventures in “planned special economic zones”.

The report said they included casino projects in: Van Don in the northern province of Quang Ninh; Bac Van Phong in the central Khanh Hoa province; and Phu Quoc in the southern Kien Giang province.

Macau junket investor Suncity Group has interests in two Vietnam casino schemes in special economic zones: one as a development partner, and one as an operator.

The Vietnamese authorities had previously – according to media reports out of that country – reduced the capital commitment for large-scale casino resorts from US$4 billion to US$2 billion. But despite a decree in January 2017 allowing a trial project for gambling by economically-qualified locals at certain venues, the market is still awaiting news of how that policy will be applied in practice.

VnExpress stated – citing a report in Tuoi Tre, a Vietnamese daily newspaper – that lawmakers were opposed to a complete waiver of corporate tax liability for the first four years; a 50 percent waiver of corporate tax liability for the five years after that; and a 10 percent waiver on such tax for another 21 years.

Instead, casino resorts would be asked to pay what was termed “preferential” corporate income tax, starting from the moment they generate taxable revenue, amounting to 17 percent for the first five years of taxable income, but only until 2030. The current standard corporate tax rate in Vietnam is 20 percent to 22 percent, according to the report.

Such projects would also have to pay a higher excise tax – compared to the previous proposed rate of 10 percent to 15 percent during the first 10 years – according to the new proposal.

Plans for unlimited exemptions on leases linked to land plots and waterfronts would be scrapped. Such exemptions would instead not exceed half each project’s total lease time, and would last no more than 30 years for the Van Don and Bac Van Phong special economic zones, and 20 years for the Phu Quoc special economic zone, the Tuoi Tre newspaper reported.

VnExpress said that – based on the originally-proposed tax rates for the special economic zones, the Ministry of Planning and Investment estimated they would be able to bring a total of US$9.5 billion each year to state coffers from tax payments and land-related fees. In 2030, the total number of jobs created in the three areas was estimated to be over 760,000, helping to push up income per capita in those areas to US$13,000, or 5.4 times the current level.