In South Korea and an influential committee of the county’s National Assembly has reportedly recommended a legislative revision that could see Kangwon Land Casino obliged to pay a higher rate of tax in exchange for a 20-year extension to its license.
According to a report from Inside Asian Gaming, the Trade, Industry, Energy, SMEs and Startups Committee endorsed an amendment to the nation’s Special Act on the Assistance to the Development of Abandoned Mine Areas yesterday that would require the venue to hand over 13% of its gross gaming revenues in preference to the 25% of profit before tax it is currently compelled to surrender. The source detailed that this change would subsequently be sweetened by extending the rural property’s casino license, which is set to expire in about three years’ time, until the end of 2043.
Opened in 2000 and operated by Kangwon Land Incorporated, Kangwon Land Casino is the only property in the nation that allows locals and foreigners to gamble alongside each other. The enterprise located in eastern Gangwon Province boasts some 180 gaming tables alongside approximately 1,360 slots but reportedly booked a net loss of about $249.7 million last year owing to multiple coronavirus-related closures and the implementation of stricter social distancing and public health protocols.
The Asian branch of financial services giant JP Morgan Securities reportedly asserted that the proposed duty change comes as a result of this decline in business and could see Kangwon Land Casino’s effective tax rate rise by up to six percentage points to around 31% on a like-for-like basis. But the brokerage purportedly furthermore declared that the projected hike should come as no surprise as the venue’s public burden has increased every time its license has been extended beginning from a 10% tax on gross profits base.
GGRAsia used its own examination of this matter to report that the suggested alteration would not excuse Kangwon Land Casino from being additionally obliged to continue paying the country’s standard 10% tax on gross gaming revenues. This source purportedly revealed that the increase would likely also reduce Kangwon Land Incorporated’s annual earnings from next year onwards by approximately 6%.