Hong Kong-listed Summit Ascent Holdings Ltd could see gaming tax at its Russian integrated resort, Tigre de Cristal, double should the Russian Federation pass a draft bill proposing an increase to allowable tax rates.
In a clarification announcement to investors on Tuesday, Summit Ascent outlined its current tax responsibilities at Tigre de Cristal, located in Vladivastok in the Primorye Integrated Entertainment Zone, which sees it pay the maximum rate allowed by law of RUB9,020,000 (US$154,770) per month – equal to RUB125,000 (US$2,145) per gaming table and RUB7,500 (US$129) per gaming machine.
Tigre de Cristal has 55 gaming tables and 286 gaming machines.
However, the draft bill proposes doubling the maximum monthly tax rate to RUB250,000 (US$4,290) per gaming table and RUB15,000 (US$258) per gaming machine.
“There will be a negative impact of approximately RUB9,020,000 (US$154,770) on the monthly gaming tax payable of Tigre de Cristal, equivalent to an annual negative impact of approximately RUB108.24 million (US$1.857 million) assuming that the same number of gaming tables and gaming machines will be in operation as in September 2017,” the company said.
The draft bill has gone through a first reading by the local legislative assembly, known as the State Duma, and must go through two more before it can be signed into law with the second reading scheduled for this Friday 10 November.
Summit Ascent said that the Primorsky Government also intends to recommend no change to the tax imposed on the company even if the law is passed in order to attract investors to continue investing in the Primorsky Integrated Entertainment Zone, but added “there is no guarantee that the Primorsky Krai Duma would necessarily approve such a proposal.”
Gaming tax in the Russian Federation has long been based on a fixed levy per gaming table or machine rather than on a percentage of gaming revenue, with taxes payable to local governments.
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