Controversial tax concessions to Australian casino mogul, James Packer’s local consortium, Lake Leisure was given official approval by Minister of Investment Promotion, Laksman Yapa Abeywardena.
Situated at D.R Wijewardena Mawatha, the US$ 350 million mixed development, which will include extensive gaming facilities was given a 10-year exemption from income tax in addition to a further concessionary 6 percent tax rate for 12 years.
According to the gazette issued by Abeywardena, the project will encompass a 400-room hotel with meeting and convention facilities, fine dining restaurants and other associated facilities and is expected to generate approximately 2,600 direct employment opportunities.
The applicable flat rate of 5 percent will be charged on gaming revenues, similar to proposed levies on a proposed resort by John Keells. However, no mention of corporate tax for casino profits was made in the notice, unlike the latter development.
Sri Lanka currently maintains the lowest taxes on casino revenues when compared with regional competitors in the industry like Macao and Singapore which both maintain rates of 40 and 22 percent respectively.
Lake Leisure is a joint venture between local entrepreneur, Ravi Wijeratne’s Rank Holdings and Packer who holds the majority stake in the partnership.
Tax concessions on the casino and resort have been projected to cost the state as much as US$ 1 billion in foregone revenue.( CF)