Philippines government seeks to clawback unpaid tax from PAGCOR to shore up its heath care coffers
PHILIPPINES CASINO OPERATIONS PAGCOR Owes US$327m in Unpaid Taxes
Philippine state-owned casino operator and regulator PAGCOR (Philippine Amusement And Gaming Corporation) owes the government US$327m in unpaid taxes according to an investigation from the state-run Commission On Audit (COA).
Te underpayment relates to taxation accrued from 2011 to 2015. PAGCOR is taxed at 50 per cent following the deduction of a five per cent franchise tax. Te COA investigation claims PAGCOR should have paid $2.08bn during the five-yearsm but actually only paid $1.53bn.
COA said that PAGCOR had only paid tax on its gross earnings from casino gaming as those coming solely from casino gaming rather than all its income streams.
COA stated: “Te Office Of Te General Counsel, Legal Services Sector of this Commission, clarified in its memorandum dated June 29, 2015, that jurisprudence dictates that when we speak of the “gross earnings”, we mean the entire earnings or receipts of such person or corporation from the business or operation to which we refer. Since the law does not distinguish as to what constitutes aggregate
Macau
Macau Gaming Information Association (MGIA) was formed in February to promote collaboration amongst junket operators. The number of registered promoters has fallen from 235 in 2014 to a current 142, a 40 per cent fall, and nearly all have cut back on Macau operations. Gambling debts are not enforceable in Chinese courts, and Macau junkets’ collection problems have grown worse in contracting market and slowing mainland economy. VIP play was once two-thirds of Macau’s gaming revenue, reaching a high of 73 per cent in 2011. Since then, the percentage has dipped and, more troubling, since 2014, VIP revenue has fallen by more than half, from a high of US$29bn in 2014 to US$14bn last year. Working with Macau authorities, MGIA is creating a credit database that protects proprietary information and complies with Macau’s privacy laws.
gross earnings, the Philippine Amusement And Gaming Corporation lacks the authority to make any distinctions and must construe the words in its general sense consistent with the principle “where the law does not distinguish, neither do we distinguish.
Terefore, the aggregate gross earnings of the Philippine Amusement And Gaming Corporation from which the 50 per cent government share shall be computed should not only mean income from gaming revenues but should include income from other related services as well. We stand firm with our stance that aggregate gross earnings pertained to the totality of the income from gaming revenues and income from other related services.”
PAGCOR has responded stating that it did not remitt P24bn to the government due to the treasury’s failure to properly bill the state gambling regulator. Records showed PAGCOR failed to remit the entire P76.3 billion from its gross earnings of P158.1 billion from 2011 to 2014. Total remittances for the period were short by P24,053,929,055.82, the report said. Te Bureau of Treasury has asked PAGCOR in writing to remit the said amount.
ASIA & OCEANIA
TAIWAN – As Penghu gears up for a casino gaming referendum, Global Market Advisors (GMA) has stated that a future casino market in Taiwan would be up there with Japan in terms of how lucrative it could be.
The analytical group has issued a thought- leadership piece entitled, “History and Current Status of Gaming in Taiwan,” authored by Bill Bryson, who heads GMA’s office in Taipei, serving greater China. The white paper provides an informative historical perspective on the attempts to legalize gaming in Taiwan, the current status of efforts to promote casino gaming in Taiwan, and the associated legislative mechanics. Insights on the upcoming casino gaming referendum to be held in Penghu, and the likelihood of gaming on the islands of Matsu and Kinmen, are also provided.
“Taiwan is very interesting to the biggest corporations in the global casino industry,” Mr. Bryson stated. He continued, “Taiwan has shown an interest in creating a casino gaming industry on Taiwan’s offshore islands, with a focus on economic and tourism development. The question is whether or not this interest will persist after the recent handover of the government to the Democratic Progressive Party. While not a certainty, and despite some recent starts and stops, GMA believes there is reason to be optimistic.”
Andrew Klebanow, Senior Partner at GMA stated: “Taiwan ranks with Japan as a potential lucrative casino gaming jurisdiction. The pending referendum in Penghu, and the possibility of a referendum in Kinmen, has renewed interest in Taiwan among foreign casino operators. GMA’s thought-leadership and advisory support will hopefully serve the purpose of keeping interested investors apprised of developments in this emerging gaming venue.”
China Wynn Palace set to open August 22
Wynn Macau has announced it will open its new resort, Wynn Palace, in the Cotai area of Macau on August 22, 2016. Te company expects that the opening of Wynn Palace will help launch a new era of prosperity for Macau, attracting more international tourists to the city and further supporting its development as a world center of tourism and leisure.
Wynn Palace is a luxurious integrated resort on Cotai, a new development by Steve Wynn, Chairman and CEO of Wynn Resorts, Limited. Tis is his second resort in Macau since the opening of Wynn Macau in 2006.
Te magnificent US$4.1 billion, floral-themed Wynn Palace is conveniently situated just a minute away from Macau Airport, whereby guests are transported via air-conditioned Skycabs that traverse a stunning eight- acre Performance Lake.
Te second luxurious integrated resort in Macau by Steve Wynn, Chairman and CEO of Wynn Resorts, features a 28-storey hotel with 1,700 well- appointed rooms, spectacular, large-scale floral displays, superbly designed gaming spaces, versatile meetings facilities, an opulent spa and salon, renowned luxury retail and gourmet dining outlets.
Taiwan has long been a venue of interest among foreign casino investors, originally because of the importance of Taiwan as a source of customers and more recently because of the potential to reach Chinese customers through the ever-increasing transportation and tourism links between Taiwan and China.
The paper states: “The effort to bring casino gaming to Taiwan, however, has been a journey of stops and starts over the past 25-plus years, though there has been fairly steady progress since 2009. Fast forward to 2016, and Penghu is once again preparing to hold a casino gaming referendum. The question is – will this be a repeat of 2009, or will it herald an era of casino development in Taiwan? While the former is possible, there is reason to be optimistic about the latter. The passage of a referendum in Penghu, which locals consider part of Taiwan, would likely force the legislature to pass the draft Act. Should the draft Act pass, then the process of accepting and processing applications for casino licenses would likely begin, assuming, of course that the provisions of the draft Act would create an operating environment acceptable to international casino resort operators.”
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