Cambodia’s Ministry of Economy and Finance (MEF) has begun implementing a new taxation system for casinos, replacing the previous “lump sum” system with a new tax on gross gaming revenues.
According to a report by The Khmer Times, the revenue-based tax model was officially adopted on 30 December 2022, more than two years after Cambodia’s long-awaited casino bill, the Law on the Management of Integrated Resorts and Commercial Gambling (LMCG), was passed into law.
The LMCG sets the tax rate on mass gaming at 7% and on VIP at 4% as well as outlining a raft of other new regulatory controls, although the MEF has stated that these controls will be gradually implemented over the course of a five-year grace period.
Mey Vann, Secretary of State and a member of the General Secretariat of the Commercial Gambling Management Commission of Cambodia (CGMC), told The Khmer Times that the new rules would allow for greater oversight of the industry.
“This means that there would no longer be cases of hiding cash to be paid to the authority even by the casino owners and tax officials, as the rules and procedures determine check-and-balance practices for the balanced power among operators, regulators, inspectors and other relevant stakeholders involved in the implementation of the new proclamation,” Vann said.
“Check-and-balance practices mean all relevant parties are required to check or examine one another. None of them can exploit anything in the gambling business operations, while the casino party would not be able to cheat the gamblers and the gamblers would not be able to cheat the casino. Gamblers at casinos can file complaints if they have sufficient evidence.”
Vann also revealed plans to force casino owners to change the word “casino” to “commercial gambling” on all signage once the five-year grace period expires – part of efforts to market the country’s casinos as entertainment centers rather than gambling hubs.
“We cannot ask them to change immediately and so we have to give them some time as they are related to many factors such as their internal agreements and other legal aspects,” he explained.
The implementation of a new tax system comes after the CGMC issued new guidelines for the operation of commercial casinos in October which warned casino owners would be required to pay all required taxes “on time and in full” or face legal and regulatory action.
The guidelines, partly in response to a previous order from Cambodian Prime Minister Hun Sen to crackdown on illegal gambling establishments due to a dramatic rise in high-profile kidnapping cases linked to illegal casino operations, also clarified the government’s expectations of licensed casinos with casino owners and operators required to either apply for a new license or renew their existing licenses if they wished to continue operating.
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