NagaCorp faces surprise back tax bill

Cambodian casino operator NagaCorp is facing an unexpected tax bill after local authorities announced a surprise audit.

On Tuesday, the Phnom Penh Post reported that the government had launched an audit of the NagaWorld casino after finding “discrepancies” in its tax filings. Specifically, the Ministry of Economy and Finance is looking at the property’s non-gaming revenue.

NagaCorp holds a monopoly on casino gambling within a 200-kilometer radius of the capital until the year 2035. The company also struck a sweetheart deal that sees it pay an effective tax rate of 2% on its gaming revenue, while paying a flat fee on non-gaming revenue that has grown from $30,500 in 2002 to $214k in 2015.

Last year, the government hit NagaCorp with a back-tax bill of $9.4m based on a reexamination of its non-gaming revenue. NagaCorp told investors that the payment was a “one-off” but the government reportedly plans to hit the company with a bill for an additional $10m payable on its 2016 non-gaming revenue and even more once the property’s Naga 2 addition opens in 2017.