SINGAPORE

IRs to get tax break for 2020, but higher entry levy stays

Singapore’s government has granted tax breaks and other incentives to the industry to help offset the impact of the Covid-19 virus on travel, though has chosen not to reduce its entry levy for locals.

The government said the two integrated resorts will receive a tax rebate this year of 10 percent, while a property tax rebate of 30 percent will be granted for the accommodation and function room components of licensed hotels and serviced apartments, as well as MICE venues.

International cruise and regional ferry terminals will receive a 15 percent property tax rebate, while a temporary bridging loan programme will be introduced for a year to help businesses in the tourism sector with their operating costs and cash flow.

The government will also defer a planned hike in its general sales tax to 9 percent from 7 percent by about a year.

The measures were announced in the island state’s annual budget address in February and formed part of a $4 billion package designed to help stabilize the economy in the wake of the outbreak. Tourism arrivals are expected to be down by about 20 percent to 30 percent this year, with the high-spending China visitor likely to be worst affected.

The Singapore Tourism Board has also said it will waive licence fees for hotels, travel agents and tourist guides, and defray enhanced cleaning costs for hotels that provided accommodation to confirmed and suspected cases of Covid-19 infections.

MayBank Investment Bank estimates the reduction in property tax will save Genting about S$3.8 million for 2020.

“This constitutes only 70bps of our FY20 core net profit forecast of $539.1 million,” Associate Director Samuel Yin Shao Yang wrote in a note. “We were hoping that the 50 percent casino entry levy hike of 4 Apr 2019 would be rolled back a tad.”

The higher levy came as a sting in the tail for permission for the two IRs to expand facilities and add further gaming tables. As part of the package, the exclusivity period granted to the two IRs has been extended to 2030, while a two-tiered system of taxation for GGR will be introduced from 2022.

Genting Singapore, which operates Resorts World Sentosa, has said it is pessimistic about the outlook for the coming few months. The virus has had a devastating impact on tourism, while the company’s mass market segment is still suffering from the entry fee increase.

“We will be embarking on a stronger productivity drive and utilise this period to refresh and develop our offerings,” Genting said, while reporting a 9 percent drop in Q4 revenue.

According to Union Gaming, Genting saw its VIP revenue decline around 2 percent, though its mass and slots gross gambling revenue dropped 17 percent.

“However, like VIP, we think the mass/ slots segment at RWS will continue to be challenging, due in part to the increased locals entry levy, as well as travel-related slowdowns due to coronavirus. For the full year 2020 we forecast a mass/slots GGR decline of 8 percent,” it said.

Both IRs have stepped up precautionary measures to limit the spread of the coronavirus, whilst rolling out promotions to draw more local visitors.

Resorts World Sentosa and Marina Bay Sands have employed thermal scanners to scan all visitors entering the property – as well as twice-a-day temperature checks for staff.

The company has also increased the frequency of sanitization of common areas, as well as regular disinfection of gaming chips, tables and slot machines at casinos.

At Resorts World Sentosa, croupiers are required to sanitize their hands at the start and end of each game.

Marina Bay Sands has suspended its light and water show Spectra, and has suspended any large scale events involving staff.

There are also shorter operating hours at Resorts World Sentosa’s attractions including Universal Studios Singapore and S.E.A Aquarium.

Marina Bay Sands has rolled out promotions to draw in more local visitors, such as a weekday staycation package that includes a free room upgrade, breakfast and $50 dining credit from Feb 20 to April 29, whilst also offering complimentary parking to shoppers who spend more than $100 in specified periods.

Genting drops Osaka bid to focus on Yokohama

Genting Singapore has dropped its plans to bid for a licence in Osaka Japan, joining a crowded field in focusing on the Yokohama location.

The company’s shareholders in early February voted overwhelmingly in favor for the company’s plans to invest up to $10 billion on a property in Japan.

The Japan IR project offers the group an opportunity to leverage its core expertise in the development, operation, ownership, and management of IR destinations, to achieve geographical diversification and sustain its growth trajectory in the longer term,” said Genting Singapore in a written notice sent to shareholders when announcing the EGM.

Genting reiterated during the meeting that funding will come from existing cash, borrowings, and local partners, rather than tapping into existing shareholders to fund the project.

Singapore Pools reveals software blip

Singapore Pools revealed software glitches in its betting systems, affecting some iToto bets and 4-D Quick Pick bets.

Between Oct 2, 2018, and Dec 20 last year, iToto bets that were sold to some online and outlet customers had left the number 49 out of the set of random numbers generated in punters’ bets, Singapore Pools said.

This made up 0.04 percent of Toto sales. During the same period, the numbers zero and nine were also left out of bets that were randomly generated for customers who had placed 4-D Quick Pick bets over the telephone.

Singapore Pools is the only outlet in the island state authorized to offer online gambling services.