Dec 18, 2013 (LBO) - Sri Lanka has re-issued notices on tax concessions to three casino resorts with no mention of gaming being made, after initial investment approvals were withdrawn under fire.
The state has issued gazette notices for Lake Leisure Holdings by Australian gaming tycoon James Packer and local entrepreneur Ravi Wijeratne, Queensbury Leisure by Dhammika Perera, another Sri Lankan businessman and Waterfront Properties by John Keells Holdings.
Wijeratne and Perera operate existing casinos in the country, which have a de facto approval. The existing businesses are expected to be shifted to the new resorts.
The projects are so-called 'integrated resorts' with hotels, shopping, dining, entertainment and gaming facilities that have become popular in Asia over the last decade. The projects also involve apartments and commercial space.
Unlike the earlier approval notices which were withdrawn amid criticism from religious leaders and opposition legislators, the new gazettes make no mention of casinos or income tax concessions for profits on gaming revenues.
The gazette notices said a 10 year full corporate income tax holiday and a further 12 to 15 years of concessionary tax at 6 percent or half the applicable rate for the business would be given for revenues from the "sale, lease, rent proceeds of apartments, office and services space, room charges and rental income from all tenants."
No limit has been set for rental income from tenants, one of which is to be a casino of at least 50,000 square feet each.
Tax concessions to large projects has to be gazetted twice with a time period for public dissemination, approved by the cabinet and tabled in parliament under Sri Lanka's strategic investment law, to protect state revenues from ad hoc tax concessions.
But ordinary legislation and even the constitution can be changed much faster.
Steep tax concessions to gaming - including for existing ones - have already been passed in parliament which critics say is perhaps the lowest in the world at five percent of gaming revenues.
Value added tax was also lifted from gaming, a move questioned by opposition legislators in a country where food and building materials for houses of ordinary citizens are taxed at high levels mostly to protect producers.
The integrated resorts like most luxury property projects would be able to import most of the building material free of import duty, ports and development levy and value added tax, the gazette notices said.
The integrated resorts are expected to bring in high spending tourists, who may spend more than 600 dollars a day in the country boosting the tourism sector and overall economic activity.
Packer's Crown group is building a 350 million US dollar 'integrated super luxury resort' which will attract "high spending foreign tourists" with "large foreign exchange turnover" the government notice said.
John Keells Holdings is building a 650 million dollar project which may be expanded by another 100 million US dollars with 300 million US dollars in foreign investments.
Perera's 300 million US dollar Queensbury Leisure would involve 200 million US dollars of foreign investments.
