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In a move, that promises succor to the casino industry, news has come in that the Nepalese government has decided to waive off 75% of their royalty dues, besides making major changes to the tax structure for 2014-15, in order to boost tourism.
In April, PokerGuru had reported about the closure of all casinos in the country, by the government for non-payment of outstanding tax and royalty dues. The decision had adversely affected almost eleven thousand workers, who depended on casino jobs for a living.
Collectively the ten casinos owed the government 675.67 Nepalese rupees (approx US $6.8 million).
In March 2014, the Casinos had also approached the Nepalese Supreme Court for relief but at that time, the Court had refused to intervene in the matter. In June 2014, the court passed an interim order to the government against shutting down mini-casinos in 3 and 4 star hotels.
Now reports state that months after its last standoff, the government has decided to change its hard stance on the tax structure, after receiving representations from various casinos.
Additionally, the government has given a major waiver of 75% on total royalty and penalties due, to casinos that had closed before 18th October 2013, on receipt of written applications.
For casinos that had closed in May 2014, there is a 25% waive off on total tax and penalties.
In further relief, the government has reduced the annual royalty for casinos, from the earlier 4 crores Nepalese Rupees to 3 crores now. For mini-casinos having only electronic gaming equipment and slot machines, this royalty has been reduced from 3 crores Nepalese Rupees to 2 crores.
However, a penalty of 15% per annum is to be charged for non-payment of royalty within three months of the due date and another 15% for payment after the first three months. The nodal body to collect payments will be the Ministry of Culture, Tourism and Civil Aviation.
The state has performed badly past few years in terms of revenue and economists believe this move is in the right direction, towards attracting foreign money. Experts have cited several incentives for various industries to revive the failing fiscal health of the country.
Nepal was among the first countries to permit casinos offering services to foreigners, ever since 1967. Subsequent political changes, with Maoist influences involved changed this scenario, which especially worsened after King Gyanendra abdicated his throne, paving the way for democracy.
With these welcome developments, it seems to bode well for the casino and tourism industry in Nepal, however, only time will reveal the results in the following months.