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Genting Malaysia expresses concern on recent service tax hike in Malaysia

October 16, 2023 Malaysia Casino & Hotel

Genting Malaysia, the operator of a casino, is concerned about the recent hike in the service tax on companies in Malaysia. Genting Malaysia’s financial performance is directly impacted by the Malaysian Prime Minister’s declaration in the nation’s 2024 budget of a 2% increase in the service tax, from 6% to 8%.

The gambling industry is negatively impacted by this service tax hike, according to Nomura analysts. Genting Malaysia and its parent company, Genting Berhad, would be especially hard hit. The service tax on gaming operations has always been absorbed by gaming enterprises, thus this tax hike will have a detrimental effect on their EBITDA margins.

A “marginal positive” for the Genting firms, according to Nomura analysts, is a 5% decrease in the entertainment charge on theme parks, family leisure centers, indoor gaming centers, and simulators.

In order to attract visitors and investors, especially from China and India, the Malaysian government is also working on projects to strengthen the tourism sector. Some of these efforts include enhancing Visa-On-Arrival services, introducing social visit permits, and providing Multiple Entry Visas. The government hopes to have 26.1 million visitors by 2026; as of August 2023, visits have tripled from 13 million to 26 million annually.