Govt taxing casinos with its whim?

KATHMANDU: Stakes are high but the game is complicated as far as casinos, the hotels providing them with space and the government are concerned.

With the unprecedented police action against casinos recently, what has come to the fore has but made the scenario more complicated with government claiming millions were outstanding on the part of casinos to be paid to the state as royalty. However, for the lack of clarity on policy, hotels and casinos are embroiled in a blame game.

The catch is: Who is liable to pay tax and royalty to the government —casinos or the hotels that have leased the space out to them?

In a recent crackdown, police on Saturday arrested Harka Bahadur Ayer, GM of Casino Shangri-La, following the requests from the Department of Revenue Investigation, which said the posh gambling station had failed to pay millions of rupees as tax and royalty.

Senior advocate Sushil Panta, who is also the legal adviser for Nepal Recreation Centre that operates Casino Shangri-La, told THT that chasing casinos was simply DRI atrocity. Citing clause 16 (C) of the licence issued to the hotels, Panta claimed the government should collect tax from the hotels, not the casinos. “As per the Financial Act and the agreement between the hotels and the casino operators, the hotels have to pay the tax and royalty,” argued Panta.

Currently there are eight casinos operating in Kathmandu — all in five-star hotel premises.

DRI Director General Mahesh Prasad Dahal, however, said the tax and royalty liability ‘can be passed on to hotels only if the casinos fail to clear their dues’. “The casino operators pay to hotels as per their internal agreements. But if any question arises, we have to recover the amount from hotels,” added Dahal.

Advocate Shiva Rijal, who is looking into the matters on behalf of hotels, claimed NRC, operator of five casinos, has to pay the tax and royalty as it has been doing the business. “Hotel, license of casino and casino operation are different businesses.” A hotel after acquiring a casino license has to pay royalty (Rs 20 million annually), annual renewal fee and income tax.

Shangri-La Casino operator Bodh Bikram Pandey said the set practice is casinos pay to hotels. “But there has been so much of confusion. The casinos and hotels have internal agreements,” he said.

http://thehimalayantimes.com/fullNews.php?headline=Govt+taxing+casinos+with+its+whim%3F&NewsID=268802&a=3