Pagcor lowers license fees for operators

State-owned Philippine Amusement and Gaming Corporation (Pagcor) has decided to reduce the license fees for four casino operators at the Entertainment City after the Bureau of Internal Revenue (BIR) imposed additional taxes on gaming revenues. In a statement, the country’s gaming regulator and operator said yesterday that the decision to cut license fees by up to 10 percent is in response to the additional tax burden that the government’s main tax agency wanted to impose on its four licensees.

In April last year, the BIR issued memorandum circular 33 that requires Entertainment City licensees to pay income tax on their gaming revenues. On the other hand, Pagcor collects license fees from these companies, which supposed to be “in lieu of all taxes.”

“In the spirit of continuity and predictable governance, Pagcor will uphold and abide by the license terms agreed during the previous administration…by approving the adjustment of license fees on gaming revenues effective April 1, 2014,” the state-owned firm said.

“Pagcor believes that this is a practical solution that preserves for the Philippine government as a whole the economic benefits already being derived from the provisional license,” it added.

But Pagcor clarified that licensees’ non-gaming revenues such as those from hotels are subject to 30 percent corporate income tax.

The government’s total income-generating capacity from Pagcors adjusted license fees on gaming revenues and corporate income taxes on non-gaming revenues is expected to be unchanged, the regulator pointed out.

Pagcor has currently four license agreement with Travellers International Hotel Group, Inc., Bloomberry Resorts and Hotels, Inc., MCE Leisure (Philippines) Corp., and Tiger Resorts Leisure and Entertainment, Inc. at the Entertainment City.

The BIR order, however, also covers Resorts World Manila in Pasay City, near the Ninoy Aquino International Airport terminal III.

In a separate statement, Clarence Chung, Melco Crown Philippines chairman and president  said that the latest action by Pagcor is a welcome development.

“The development of City of Dreams Manila is progressing well and we firmly believe our integrated leisure and entertainment destination resort will play a key role in furthering the ambitions of the Philippines in establishing the country as a major leisure and tourism destination in the region,” Chung said.

Melco’s City of Dreams Manila is expected to open later this year.

To date, only Bloomberry’s Solaire Casino & Resort is operating at the Entertainment City.