Potential tax rise could hurt Genting Malaysia’s profits

Analysts in Malaysia have mooted a possible rise in casino taxes in next year’s budget, which would impact Genting’s earnings.  

Kong Heng Siong, analyst at RHB Research Institute Sdn Bhd, suggested that a raise in the current 25 percent flat rate might be on the cards since it has remained unchanged since 1998, when it was raised from 22 to 25 percent.  Kong estimated that Genting would lose 2.4 to 2.5 percent on its earnings from Genting Highlands for every one percent rise in the tax rate.  The Government is looking for ways to increase its revenues and a one percent increase in gaming taxes would translate to between RMB45 and 55 million.