The Cambodian government is conducting an audit of NagaWorld to assess its tax liabilities on non-gaming operations, local newspaper Phnom Penh Post reports.
“The audit is ongoing and we have yet to finalise how much NagaWorld owes for their non-gaming operations,” said Ros Phirun, deputy director of the finance industry department at the Ministry of Economy and Finance (MEF). “The reason why we are doing this is because we found last year that they needed to pay more [in taxes].”
The post said the probe began after finding “discrepancies” last year.
In 2015, Nagacorp paid $6.9 million in taxes on gross profit of $327.8 million after generating a record $503.7 million in revenue, according to its 2015 financial year statement.
The government sent NagaCorp an additional tax bill of $9.4 million after auditing the company’s non-gaming revenue, which includes earnings from its hotel, restaurant and other non-gaming activities.
NagaCorp in its 2015 annual report however, claimed it was exempted from additional taxes by a 2006 agreement that granted a seven-year grace period to complete construction of its multi-storey hotel, describing the $9.4 million tax bill as a one off payment.
While Phirun admitted the government had given NagaCorp time to complete all construction work on its hotel and casino complex, he could not explain why the company had been granted an extra two-year grace period. Going forward, NagaWorld will be audited annually and subject to extra tax payments, he said.
“We had to wait for the completion of NagaWorld, when the building was a fully functional physical facility,” he said. “However, it is now time for NagaWorld to respect our regulations, because they are a legal and publicly traded company.”
Phirun also said a similar tax scheme would apply to Naga 2.
Mey Chan Veasna, a statistics officer at the MEF’s finance industry department, in charge of the current audit of NagaWorld, says the casino operator is due to pay more than $10 million in additional non-gaming taxes this year.
“The company has already agreed to pay,” he said, adding that the government could receive the payment as early as next month.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264