Inquirer – The state-run Philippine Amusement & Gaming Corp. has struck a deal with gaming operators to cut license fees by 10-percent of gross gaming revenues to neutralize the burden arising from a controversial judicial ruling that changes the gaming tax regime.
The reduction in license fee as a percentage of gross gaming revenues from both high-roller VIP (very important person) and mass markets was intended to “make whole” the gaming operators after a Supreme Court order that removed Pagcor’s tax exempt status. As a consequence, the tax regime changes for all private licensees as well. Instead of paying the 5 percent franchise tax on gross gaming revenues, they will be be subjected to the 30-percent regular corporate income tax.
To address the game-changing impact of its loss of tax exemption, Pagcor has entered into an agreement with its Entertainment City licensees, namely: tycoon Andrew Tan-led Travellers International Hotel Group, Inc., Enrique Razon Jr.-led Bloomberry Resorts and Hotels, Inc., Macau’s Melco Crown-led MCE Leisure (Philippines) Corp., and Okada-led Tiger Resorts Leisure and Entertainment Inc. on the 10-percent reduction in license fees.
In a disclosure to the Philippine Stock Exchange, Travellers – which also operates Resorts World Manila in Newport City – said this was a “mutually beneficial and practical” solution to address the additional exposure to corporate income tax brought about by Bureau of Internal Revenue (“BIR”) Revenue Memorandum Circular No. 33-2013 (RMC 33-2013).
“Such solution not only preserves for the Philippine government the financial benefits that it already derives from the provisional licenses but also validates Pagcor’s commitment to uphold and abide by the terms of the provisional license,” Travellers said.
