NagaWorld reaches $15M tax settlement with gov’t
NagaWorld reaches $15M tax settlement with gov’t
NagaWorld, Phnom Penh’s landmark casino resort complex, paid more than $15 million last week to settle its tax liabilities on non-gaming business operations following a government audit of its parent company’s 2015 financial statements, a Ministry of Economy and Finance (MEF) official said yesterday.
Ros Phirun, deputy director-general of the ministry’s finance industry department, said that in the past NagaCorp, the Hong Kong-listed parent company of NagaWorld, paid a lump-sum tax on Cambodian non-gaming revenue because its 700-room hotel and entertainment complex was still under development. However, as the complex has been fully functional since 2014 it was time to adjust this tax rate.
“We just needed to verify some data and after mutual discussions, NagaWorld agreed to pay,” he said. “The company has shown good cooperation with us and already paid an extra tax payment of more than $15 million last week.”
NagaCorp paid just $6.9 million in taxes on $327.8 million gross profit last year, having generated a record $503.7 million in revenue, according to its 2015 year-end financial statement. The company also paid an additional $9.4 million “non-gaming obligation payment” after a government audit of its 2014 financials turned up what MEF officials described as “discrepancies”.
Last week’s tax adjustment will increase its total tax contribution for 2015 operations in Cambodia to about $22 million, an effective tax rate of 6.7 percent.
NagaWorld representatives did not respond as of press time to a request for confirmation of the tax payment.
Khy Vandeth, a CNRP lawmaker and member of the National Assembly’s Commission on Economics, Finance, Banking and Auditing, said yesterday that the revision of NagaWorld’s tax bill marked an improvement in the government’s collection of revenues from casino operators. However, he said that proper collection under a transparent legal framework would result in much higher revenue from the industry.
“We are always pushing the ministry to finalise the gaming law as soon as possible because we know that without a casino law, tax payments are not transparent,” he said.
Vandeth said using the lump-sum method of assessing casino tax liabilities results in a loss of potential revenue and benefits just a few individuals.
“When the gaming law is activated and follows international standards, the revenue coming in from casinos will be much higher than it is,” he said.
