Sri Lanka Casinos bring under heavy tax regulations.
By: Staff Writer
Colombo (LNW): Sri Lanka government has ensured that the casino taxes are collected, counter criminal and minimize negative effects to society and individuals from gaming.
None of the casino owners are given any kind of tax concession, and they have to pay 70% of their income as tax, Finance State Minister Ranjith
He said that requests have been made by several casino owners to cut the amount of tax to be collected during the Covid-19 pandemic period, and it has now been forwarded to the Attorney General.
Casinos had operated without any regulations, but they have begun operating according to a regulation from this year.
The Minister further mentioned that Rs. 500 million will be charged as registration fees for 5 years when starting a casino business.
Sri Lanka wants to bring local casino players from 40 percent now to zero by charging an ever rising tax, he added.
There was a 100 dollar fee proposed from 2015, but it had not been collected up to now, Minister Siyambalapitiya said.
To discourage gambling they are being charged 50 dollars as an entry fee from April.
We expect to increase the percentage of foreigners from 90 to 95 percent, and we think the participation of Sri Lankans will be reduced to a minimum.”
Up to now only four casinos were registered. But the oligopoly could be broken under the new law, he said.
Gross collection levy rate has been increased to fifteen percent for any year commencing from April 1, 2023 on the gross collection from the business of bookmaker or business of gaming, if such gross collection exceeds Rs. 1 million per month.
Casino companies will be subjected to 40 percent income tax. Winnings above 500,000 rupees will be charged a withholding tax of 14 percent.
The current penalties on offences relating to gambling dated back from the time of cockfights in the British period, Minister Siyambalapitiya said.
“We hope to bring a casino regulatory authority like in advanced countries,” he said. “It will have penalties for illegal gambling operations.”
However the excessive entry fee could encourage underground gambling dens for local casino players, observers say. Excessive taxes on alcohol is already promoting a thriving hooch industry and high taxes are also promoting cigarette smuggling.
Every Person who carries on the business of gaming who shall be entitled to obtain a license issued Under Sec 2 of Casino Business Regulation Act No. 17 of 2010 is required to be registered with the Inland Revenue Department (hereinafter referred as “ IRD”) “within one month from the license issuance”.