Thai parliamentary casino committee completes draft bill with 17% casino tax proposal
Thailand’s push towards legalizing casinos took a significant step forward with the completion of a draft bill by a parliamentary committee.
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The legislation aims at establishing a framework for integrated entertainment complexes featuring casinos and will be read in the House of Representatives later this month.
Endorsement with strong bilateral support on the parliamentary floor is almost guaranteed. The draft bill will then be put forward for the consideration of the Cabinet, and that is also a certainty of approval given that the Thai-style integrated entertainment complexes fulfill two of the three key economic pillars set by Prime Minister Srettha Thavisin in promoting tourism and boosting domestic consumption.
An analysis by the Finance Ministry indicated that Thais will constitute three quarters of the spending at potentially 5 to 8 entertainment complexes to be built in the Southeast Asian kingdom. There will be great cause for cheer for the private sector if a proposed 17 percent casino tax goes through. The rate is roughly on par with Singapore’s tax bracket for mass gross gaming revenue, which will surely buoy investor interest.
In comparison, the Philippines levy a 25 percent rate while Japan imposes almost twice that at a rate of 30 percent. The attractive tax band echoes the economic-friendly stance of the Pheu Thai-led government in Srettha’s zeal to attract more foreign investments. The new administration’s key policies complement nicely for the upcoming Thai casino industry. Tourism is by far the pet sector for the prime minister, who rolled out a visa-free travel initiative to boost inbound tourism.
Visa exemptions for nationals from China, India and Russia have spiked visitor arrivals into Thailand, and more waivers will be extended to European countries in the Schengen area and other jurisdictions. The government’s focus on major infrastructural development centered on transportation and logistics aligns with the mega-resorts plan, which will bode well for exurban resort development prospects as good connectivity is crucial to the success of the integrated entertainment complexes. The draft legislation builds on the recommendations in the report by the previous parliamentary committee that sets out a fairly clear regulatory framework. Notably, social considerations on the potential harm of casino gambling take priority given the conservative Thai society.
Beside the headlining casino tax amount, highlights include bidder criteria requiring companies to be Thai-registered entities with paid-up capital of not less than 10 billion baht ($280 million) and an initial license period of 20 years, which augurs well for investment stability. The industry framework posits four different sizes of development investment, but the first entertainment complexes to be tendered will only be for the largest scale, commanding a minimum investment of 100 billion baht ($3 billion).
This and salient elements of the draft “Comprehensive Entertainment Facilities Act,” covering 10 sections and 68 subsections, outline the industry organizational structure, other licensing requirements, social safeguards rules, and what constitutes the content of a Thai entertainment complex.
Source: agbrief.com
