by Amrit Kharel
KATHMANDU, April 20 (Xinhua) -- Nepal's Ministry of Culture, Tourism and Civil Aviation (MoCTCA) would start a process to scrap casino operating licenses of the country's five-star hotels that failed to pay taxes and fees by the deadline set by the government, said Ranjan Krishna Aryal with the legal division of MoCTCA.
Nine out of the 10 casinos in Nepal's five-star hotels are operating without legal permits and have not been paying taxes estimated at 6.3 million U.S. dollars, according to government sources.
"Transactions made in such casinos are illegal. Tourists visiting Nepal should be informed about this," Dr. Yubaraj Khatiwada, governor of Nepal Rastra Bank, the country's central bank, told Xinhua.
Since 2006, the Nepal government has not renewed licenses for nine casinos in star-rated hotels, including those operated by international hotel chains, because the casino operators have failed to pay royalty fees and revenues. They, however, are still operating targeting foreign tourists.
A casino has to pay around 230,000 U.S. dollars in the beginning of each fiscal year when they renew their license. Nepal 's fiscal year begins on July 16 and ends on July 15 of the following year.
The MoCTCA has earlier given the casino operators its "final deadline" of April 13 to apply for license renewal with clearance certificate of all revenue and royalty dues for the fiscal year 2012-2013.
Unless the casino operators settle their outstanding royalty fees, additional fees and charges by the given deadline, licenses will be canceled and legal processes for the collection of unpaid taxes will begin, the MoCTCA said on its website.
Nonetheless, only four casinos have expressed their willingness to renew their licenses by the latest deadline set by the government.
Shangri-La Hotel Ltd., Hotel Pokhara Grande, Hotel De'l Annapurna and Hotel Soaltee Crownne Plaza have applied for license renewal, but only Shangri-La Hotel has furnished the tax clearance certificate so far, Purna Chandra Bhattarai, joint secretary at MoCTCA, said.
He added casinos operating in other five-star hotels have ignored the ministry's last deadline.
The central bank has clarified that if foreigners make some windfall in illegally-run casinos, they will not be allowed to take their winnings home.
Unaware of this legal trap, a large number of tourists who stay in those five star hotels still patronize the illegal casinos joints.
Hotel operators, however, have complained about the absence of a clear-cut policy on whether the hotel or the casino has the obligation to pay royalties and this has caused confusion among the gambling operators.
Dinesh Bahadur Bista, executive chairperson of Hotel Soaltee Crownne Plaza, said that his hotel is still fighting a legal battle with Nepal Recreation Center at the Supreme Court regarding the obligation of paying the revenues.
"Once the court gives its verdict, we will pay the royalty fees, " he said.
Hotel operators are saying that the continuous decline in tourist arrivals in Nepal has affected the casino business.
Bharat Joshi, resident manager of Hotel Yak and Yeti, said a large number of Indian and Bangladeshi tourists used to visit the casinos in the past but these days they welcome barely 30 to 40 foreigners a day.