Friday, September 13, 2013

SL approves Crown's $350m Casino deal and JKH's $ 650m project

  • Australia’s gaming tycoon’s venture to entail over $ 350 m investment
  • JKH’s mega $ 650 m project will get concessions under Strategic Development Act as well

Gaming Mogul James Packer’s play at casino investment in Sri Lanka seems to have come up trumps, with the Cabinet yesterday giving the nod for the controversial US$ 350 million deal along with the JKH venture of US$ 650 million.

Cabinet Spokesman Minister Keheliya Rambukwella told media that the two projects, which have been given significant concessions by the Government, would now go ahead. However, he reiterated that the Government would not issue new gaming licenses.

“All this has been explained before. The Finance Ministry together with the Excise Department has issued these licenses and the gaming section of the integrated projects will be taxed,” he added.

Rank Holdings, which is the local partner of the US$ 350 million James Packer venture, has obtained a land under a new company titled Lake Leisure Holdings. The 2.5 acre land opposite Lake House down D.R. Wijewardene Mawatha will be given on a 50 year lease for Rs. 2.8 billion.

The Government approved tax concessions through a midnight gazette notification released on 18 July, which resulted in the ire of United National Party (UNP) MP and Economist Dr. Harsha de Silva.

Speaking to the media Dr. de Silva insisted that the US$ 350 million project was detrimental to the country as it did not bring in any income through taxes and should never have been given approval.

A copy of the Gazette notification showed that in addition to the 10 year income tax holiday, the casino will be charged only 6% tax for another 12 years. It also details exemptions from Customs Duty, Construction Industry Guarantee Fund Levy, Port and Airport Development Levy, V.A.T, PAYE tax for foreign employees (five years), Withholding Tax on foreign loan interest and Tax on Dividends for 11 years.

Comparing Sri Lanka’s concessions with the rest of the world, Dr. de Silva pointed out that Macau, which is the one of the largest gaming regions in the world charged 40% tax, while Singapore, Malaysia and the Philippines also had high rates.

“Sri Lanka goes into the record books as the first country in the world that exempts casinos from tax,” he charged, adding that there were massive irregularities in the deal including the licensing of the casino.

The JKH venture was also approved by the Cabinet in a separate paper submitted by Investment Promotion Minister Lakshman Yapa Abeywardene.

“It will create direct employment opportunities for 3,000-4,000 persons during the construction period and in addition 3,000 direct and indirect employment on commencement of business operations. Cabinet agreed to grant concessions under the Strategic Development Project Act, No. 14 of 2008 (as amended) for the project,” the paper noted.

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