inister of Finance, Ravi Karunanayake, explained the recommendations last week to Parliament in the 2016 budget.
Under the previous budget, casinos were required to charge US$100 to all players entering the facility, both locals and foreigners. However, the levy was proposed during the 2015 interim budget and never came into affect. To make up lost revenue, the government has instead decided to increase the annual license fee from Rs 200m (US$1.4m) to Rs 400m.
“We expect that this initiative will convert the infamous casino proposal of the former government into a robust venture of a financial centre which will be creating a number of new employment opportunities. This method is fairly transparent and will allow a seamless transfer of benefits without interference, leakages and corruption,” said Karunanayake.
The government has also proposed to simplify its income tax structure by applying one of two tax rates, 15pc or 30pc, on businesses, with the gaming industry subject to a higher rate. This is lower than the previous 40pc income tax on betting and gaming activities in the country, however, the government plans to impose an additional 25pc tax on gaming profits.
“To avoid any undue benefit by tobacco, liquor and casino industries from corporate tax revisions and keeping in line with government policy of creating a society free of tobacco, liquor and betting and gaming. I propose to impose a surtax at the rate of 25pc of income tax liability,” remarked the Minister during his speech.
New measures will come into effect from April 1, 2016 and the government plans to raise Rs 7bn (US$105m) through the initiative.
The new government, which came into power this year, scrapped plans of the previous administration to approve three integrated resorts projects in Colombo, while James Packer was told he was never allowed back in the country.