Govt. to regulate casinos amidst dwindling cash flows
In the wake of weak revenue collection and the increase in forex irregularities, the government will introduce new legislation under the Casino Business (Regulation) Act of 2010 while amending the Betting and Gaming Levy Act of 1988 to properly regulate Sri Lanka’s casino business.
This will enable the Inland Revenue Department (IRD) to enforce newly introduced casino taxation and issue new licences without any administration and legal issues, Finance Ministry sources disclosed.
The government is in urgent need of tackling Treasury cash flow issues as its monthly collection of Rs. 141 billion is insufficient to pay Rs. 88 billion for salaries, Rs. 30 billion for pension and Samurdhi welfare, Rs. 6.5 billion for fertiliser, Rs. 8.7 billion for medicine, and Rs. 154 billion for other administration costs including transport.
Annual taxes imposed on casinos have been increased by 150 per cent to Rs. 500 million from Rs. 200 million, State FinanceMinister Ranjith Siyambalapitiya said.
In addition 40 per cent tax on the profit of casinos will also be introduced following the streamlining of the IRD administrative procedure.
The government is also considering the possibility of setting up a Casino Regulatory Authority in accordance with a suggestion made by the Committee on Public Finance (COPF) recently.
Although it was proposed to increase the casino entrance levy to US$200 from $100 or equivalent in Sri Lankan rupees per person sometime back, it was not collected.
The Finance Ministry will introduce a new rule making it compulsory for foreigners to pay in foreign currencies for betting and gambling. It will prohibit the system of issuing tokens through foreign agents to enter and play casino games in the country.
The token system has enabled foreigners to visit Sri Lanka and playing casino games making upfront payment to agents abroad and using chits or tokens purchased from them and the money is deposited in their country.
This underground banking method similar to “Undial” or “Hawala”system has been widely used in the transfer of money from Sri Lanka by local casinos, a senior Ministry official said.
An illegal racket which organised tours for the wealthy Indians to casinos in Sri Lanka is continuing this practice of allowing local casino operators to stash money abroad, he said.
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