Japan is considering a tax rate of up to 50% on revenue made by local casinos, with the proceeds to be split between national and local governments, according to The Japan Times.
The report cites ongoing discussions between the ruling Liberal Democratic Party and Komeito which have outlined plans for a specific tax rate to be included in legislation to be submitted to the Diet in the coming months.
The proposed tax rate would start at 30% for operators with annual revenue of up to ¥300 billion (US$2.8 billion), rising to 40% for revenue between ¥300 billion and ¥400 billion (US$3.7 billion) and to 50% for revenue between ¥400 billion and ¥500 billion (US$4.7 billion).
Proceeds from gaming taxes would be used to ensure adequate funding for social security and gambling addiction measures.
The tax revelations follow a meeting by the Japan IR Promotion Inter-Parliamentary Group on 14 February, which was attended by the governors of Osaka, Nagasaki, Hokkaido and Wakayama and outlined further likely restrictions to be placed on casino operators eyeing Japan.
They include a proposal to limit the size of the casino within any integrated resort to 3% of total floor space while capping the size of the IR to 15,000 square meters. It has also proposed capping the number of visits by locals to 10 times with any 28-day period and to three visits within any given week.
However, such measures could prove counter-productive with Morgan Stanley analysts warning in a Tuesday note that they “could discourage potential casino operators from investing too much on capex due to lower ROIC.”
The IR Implementation Bill is expected to be submitted before the end of the June 2018 ordinary Diet session.
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