Solaire Resort and Casino owner and operator Bloomberry Resorts Corp (BLOOM.PS) says that the Supreme Court of the Philippines has decided in its favor regarding a corporate tax imposed by the Bureau of Internal Revenue (BIR), according to GGRAsia.
The tax dispute has to do with a 30 percent corporate income tax the BIR imposed on private sector casino operators licensed by the Philippine Amusement and Gaming Corp (PAGCOR) in April 2013. The Philippine-based Bloomberry, which owns and operates the resort and casino in Manila’s Entertainment City, filed a petition with the country’s Supreme Court in June 2014 seeking to cancel the provision from the BIR.
In a filing to the Philippine Stock Exchange on Tuesday, Bloomberry stated, “The Supreme Court granted the certiorari petition of Bloomberry Resorts and Hotels Inc (an indirect subsidiary of Bloomberry) against the imposition of corporate income tax by the Bureau of Internal Revenue on Bloomberry Resorts and Hotels as a licensed casino operator of Pagcor,” according to the news report. The firm added, “This Supreme Court decision will allow Pagcor, and Bloomberry Resorts and Hotels as an integrated casino resort, to revert to the original licence fee structure of 15 percent and 25 percent licence fee (inclusive of the 5 percent franchise tax) for high rollers/junket and mass gaming respectively.”
The argument by the billionaire Enrique Razon-led Bloomberry was, “that as [a] contracting party of Pagcor, it was subject only to the 5 percent franchise tax on its gross gaming revenue, in lieu of all taxes,” as provided in the gaming regulator’s charter, according to a SEC release from the Philippines Stock Exchange.
Bloomberry said that the decision was released on Monday, September 5, but dated August 10. According to the news agency, the firm stated that the ruling “ordered the Bureau of Internal Revenue to cease and desist from imposing corporate income tax on income from gaming operations of casinos duly licensed by Pagcor.”
The announcement in 2013 by the BIR was followed by PAGCOR’s announcement in May 2014 that in lieu of the 30 percent corporate tax provision it was cutting taxes on mass and VIP gambling by 10 percent for private sector franchises. Soon after Philippine President Rodrigo Duterte’s June 30 inauguration, his newly appointed PAGCOR administration announced that it was canceling the tax cut provided to casino operators by the gaming regulator’s previous administration. The gaming regulator added that effective immediately, four Entertainment City casino operators, including Bloomberry Resorts and Hotels Inc., Travellers International Hotel Group Inc., MCE Leisure (Philippines) Corp. and Tiger Resorts Leisure and Entertainment Inc., would be ordered to pay the original license fee rate.