The Singapore government announced its 2020 budget on Tuesday, with additional relief measures to support the tourism sector in the wake of the Coronavirus outbreak among the key features.
However, Singapore’s two integrated resorts – Marina Bay Sands and Resorts World Sentosa – can expect only minimal benefit compared with other elements of the sector.
While Deputy Prime Minister Heng Swee Keat, who is also Minister of Finance, revealed a 30% property tax rebate for the accommodation and function room components of licensed hotels and for prescribed MICE venues, the city’s IRs will have to make do with a lesser 10% rebate. They have also been granted a 12-month stay on an impending GST increase from 7% to 9%, with the hike delayed from sometime between 2021 and 2025 to sometime between 2022 and 2025.
Maybank’s Samuel Yin Shao Yang said in a note that the measures will have no material impact on earnings estimates through 2022.
“On the property tax rebate, we estimate that RWS pays SG$38 million p.a. in property tax,” he said. “The 10% property tax rebate implies a cost saving of only SG$3.8m for FY20. This constitutes only 70bps of our FY20 core net profit forecast of SG$539.1 million.
“On the delay in the GST hike, it appears to be a delay in effective gaming tax rates. Singaporean effective gaming tax rates are 12% (5% casino tax + 7% GST) for VIP and 22% (15% casino tax and 7% GST) for mass market.
“That said, we were not imputing the higher GST rate into our forecasts which stretch until FY22. Therefore, we are leaving our earnings estimates unchanged.”
Singapore’s budget focused largely on supporting jobs, including a SG$4 billion package to help both workers and businesses via job and cash flow support.
