The move to introduce a casino tax hike in Malaysia is expected to bring up an onslaught of new casinos in the country. Already there are many proposed sites, such as the merging of Penang s Peninsula Development Corporation in Marina Bay Sands into a new business entity called Genting Entertainment plc. Also in the pipeline is the establishment of a second Sinquerim Resort and Casino in Kuala Lumpur, the former site of the now closed Penthouse Hotel & Casino. There are also multiple proposals for the development of Kuala Lumpur International Airport, including a proposed extension to the existing Kuala Lumpur International Airport and construction of a new international airport facility that will include a new terminal, ticketing system, hotel and casino facilities. It is expected that all this will take place over the next two to three years.
The Malaysian government is expected to announce a final decision on the introduction of a tax increase at some point during 2021. For anyone who is against the increase, they have been able to stave off the move through a series of counter-proposals, most of which so far prove to be unsuccessful. However, with both political parties in office promising to support the move and independent analysts predicting the impact of the move, there are high chances that the final decision on the casino tax increase will be implemented. What is certain is that there will be a rise in taxes on both gambling and gaming devices in Malaysia. What follows will provide an opportunity for punters to capitalize on the situation for the benefit of their casino gambling accounts.
In coming days, all casinos and all operators must register for the new tax hike schedule that is to be implemented. This will require all licensed operators to upgrade their equipment and computer systems for use in online poker and gaming. The upgrade will be charged at an applicable rate. Poker rooms and casinos have until 30 days from the date of issue of the decision to begin the payment of the new tax.
Online casinos in Malaysia, which include the most of the ones in Singapore, must operate according to a set system for calculation of taxes and allocating tax payments. This is called the Single Tax System or the STS. The government issued a circular, called the Circular on the Gaming Industry (SMG), inviting all operators to register for the new Single Tax System on or before 31 March 2021. The circular also covers the operation of online casinos. SMG has generated a lot of confusion, particularly among operators and gaming retailers in Malaysia. A number of retailers have already closed, while others are considering the option of moving to other offshore jurisdictions, like China.
Some retailers have been quoted as saying that they would close if the Malaysian government announced that a one-time fee for accessing the offshore casino account was introduced. Others have threatened to move their business elsewhere should the tax hike to be announced. However, there are some operators who have chosen not to take the proposal due to its negative implications on their profitability. It is believed that the Circular on the Gaming Industry alone could affect about 15 percent of the total casino industry in Malaysia. The impact would be less, if other countries around the globe including those in South East Asia such as Singapore, Thailand and others follow suit.
Poker is a very popular game in Malaysia and many people play it. However, this is just one source of revenue for them. Many operators have other sources of income that would absorb the loss that the casinos have to make in case they have to levy more taxes. The revenue earned by the poker rooms by playing cards or roulette is much lower than what they earn by gambling. Hence, the government’s decision to introduce one-time gaming tax may be a step towards reducing the profitability of these businesses.
Poker sites have also been contacted by the Malaysian Department of Internal Revenue, so that they may explain their position on the tax hike. The officials have also discussed with the operators the ways on how they can minimize their losses from introducing the tax to their online casinos. One of these is by lowering the winnings that they are willing to pay out per player. Another way is by increasing the frequency of payments that are required by players. These two options will surely reduce the amount of tax that they have to pay.
Some online casinos have also offered refunds to their customers in the event that the government has announced any increase in the tax rate. This is one way on how they can still generate revenue despite the increase. However, it is important to note that the refunds should not be extended to players who have already won any money. They must first complete their winnings before they can claim their refund.
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source https://onlinemalaysia.casino/uncategorized/malaysia-casino-tax-hike/
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