The major casino company is appealing a tax incentives decision of the Ministry of Finance concerning its Resorts World Genting redevelopment plan
Casino operator Genting Malaysia Berhad has been granted a leave for the commencement of a judicial review of a decision of the Malaysian Ministry of Finance to amend a previous agreement that would have given the company certain tax incentives.
Genting operates the Resorts World Genting integrated resort located just outside the Malaysian capital, Kuala Lumpur. The property includes the Asian nation’s only land-based casino.
The company said yesterday in a filing with Bursa Malaysia that there have been certain important developments in its ongoing dispute with the Finance Ministry over previously approved tax incentives.
The company explained that its application for tax incentives for its ten-year Genting Integrated Tourism Plan was approved by the Ministry in late 2014. Among other things, that approval entitled Genting “to claim for income tax exemption equivalent to 100% of qualifying capital expenditure incurred for a period of 10 years.”
The gaming and hospitality giant announced a few years back that it would invest nearly $2.5 billion into redeveloping and upgrading its Resorts World Genting property. Its renovation plan also included the addition of a Fox-branded theme park. That portion of the redevelopment scheme is currently being the subject of an expensive legal battle between Genting and Fox. The casino company is suing the entertainment conglomerate for backing out of the theme park plan.
Amendments in the Tax Incentives Agreement
In December 2017, the Malaysian Finance Ministry informed Genting that it had amended the tax incentives agreement. The company said in yesterday’s filing that the amendments do not “remove the tax incentives previously granted but will effectively prolong the utilisation period of the tax allowances significantly.”
Genting filed an appeal to the Ministry, seeking to reverse the latter’s decision, but the appeal was turned down in September 2018. The company then turned to the Kuala Lumpur High Court. The court yesterday granted Genting’s application a leave to commence judicial review of the Ministry’s decision and ordered a state of said decision.
Malaysian lawmakers created more tax trouble for Genting last year. The government agreed to increase gambling taxes and license fees in a bid to secure more funds for the country’s budget. Under the new tax structure, Genting will have to pay a 35% tax on its gross gambling revenue, up from 25%. In addition, its annual license fee has been increased to MYR150 million from MYR120 million.
As mentioned above, Genting is involved in another legal dispute stemming from its Resorts World Genting redevelopment plan. Last year, the company filed a lawsuit against Fox and Disney, seeking $1 billion in damages over a failed Fox-branded theme park project. News emerged earlier this week that Fox and Disney countersued the Malaysian casino group.
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