Cambodia’s Ministry of Economy and Finance (MEF) has promised to apply greater scrutiny to the country’s biggest casino investor NagaCorp following the soft launch of its US$369 million NagaWorld extension, Naga2, last week.
Discussing the company’s tax obligations in the wake of a 2016 audit that saw NagaCorp charged with US$16.6 million in unpaid taxes, Deputy Director-General of the MEF’s Finance Industry Department, Ros Phirun, told The Phnom Penh Post, “As soon as Naga 2 officially starts operating, we will begin inspecting the casino as soon as possible and will proportionally apply taxes on all non-gaming operations.”
Phirun has previously stated that NagaCorp could expect to be charged an extra US$16 million in taxes every year for its NagaWorld operations, not including Naga2. The company had paid an effective tax rate of just 2% until 2014, aided by an agreement with the government that provided a seven-year grace period on tax related to non-gaming operations.
The MEF’s audit upon conclusion of that agreement last year found NagaCorp liable for an extra US$16.6 million in unpaid taxes, lifting its effective tax rate for the year to 6.7%.
Naga2, which connects to NagaWorld via the recently opened NagaCity Walk retail mall, will add another 300 gaming tables, 2,500 electronic gaming machines and 900 hotel rooms once fully operational with a heavy focus on the VIP segment.