Tax: What is the tax take?

## Fees ## Common Gaming Houses Act 1953 There is no information on the amount of application fees for a licence under Section 27A of the CGHA. It is only provided that the Minister of Finance has the discretion in deciding the application fees for a licence under the Act. ## Pool Betting Act 1967 Regulation 2 of the Pool Betting (Licence Fee) Regulations 1993 (Revised 2021) provides that a fee of RM 2,000,000.00 per annum shall be charged in respect of a licence issued under Section 5 of the PBA. While the schemes approved by the Minister may prescribe other licensing fees as prescribed under Section 16(2) of the PBA, current schemes for the operation, promotion and management of Toto Betting do not contain additional fees imposed on the licensee. Gaming machines A fee of RM 200.00 per gaming machine is payable for registration of gaming machines, in accordance with the First Schedule of the 1973 Regulations. As for a permit to operate a gaming machine, the corresponding fee is RM 5,000 per gaming machine. Lastly, the fee payable for a licence to deal in gaming machines is currently RM 50,000.00, which is a RM 40,000.00 increment from the fee payable prior to 2019. ## TAXES ## Betting and Sweepstake Duties Act 1948 The duty charged on every bet made on any totalisator or pari-mutuel promoted by the Totalisator Board established by the Racing (Totalisator Board) Act 1961 or any racing club in Malaysia or association in accordance with any approved scheme under Section 16 of the Racing (Totalisator Board) Act 1961 shall be as follows: 8% of the amount of every such bet for three digits or numbers forecast tote 4% of the amount of every such bet for forecast totalisator 4% of the amount of every such bet for win or place bets. A duty of 5% will be charged of the amount of every sweepstake promoted by any racing club in Malaysia or association on the result of a horse race or other race regardless of whether the race takes place in Malaysia. Casino: In 2019, the Ministry of Finance raised casino duties from 25% to 35% of gross gaming income. The last increment in casino duties occurred in 1998, over 20 years prior to the last increment, which saw the rate increase from 22% to 25%. ## Sales taxes Sales and Service Tax (“SST”) in Malaysia comprises two separate components, being sales tax and service tax. Service tax is a tax charged on taxable services provided by a taxable person in Malaysia during and in furtherance of his business, payable under the Service Tax Act 2018; whereas, sales tax is tax levied on imported and locally manufactured goods, payable under the Sales Tax Act 2018. For the purposes of betting and gaming products and/or services, only service tax is applicable. Under the Service Tax Act 2018 (“STA”), Section 7 of the STA provides that service tax is chargeable on any taxable service provided in Malaysia. Such persons providing any taxable service must be registered, as per Section 12 of the STA and Regulation 7 of the Service Tax Regulations 2018 (“STR”). Generally, any evasion of service tax or the assistance thereof and any giving of incorrect information relating to a liability to service tax amounts to an offence, as provided in Sections 71 and 72 of the STA respectively. Section 78 of the STA also covers offences by a “company” as defined therein, under the STA. Referring to the First Schedule of the STR on taxable persons, taxable services and the total value of taxable services, Group F: Betting and Gaming, is relevant. Under Group F, a taxable person is defined as “any person licensed under any written law relating to bettings, sweepstakes, lotteries, gaming machines or games of chance”, while the taxable services are (a) betting and gaming services and/or (b) conducting of tournaments involving bettings, sweepstakes, lotteries, gaming machines or games of chance. By virtue of the Service Tax (Rate of Tax) (Amendment) Order 2024, the rate of service tax has been increased from 6% to 8%. Betting and gaming activities falling under Group F of the First Schedule of the STR are not within any exceptions to the rate hike, therefore provision of such services is taxable at 8% effective 1 March 2024. The corresponding total value of taxable services is RM500,000.00, upon which the service tax of 8% would be payable. The computation of the value of betting and gaming services is covered in Regulation 5 while Regulation 6 of the STR prescribes when service tax for betting and gaming activities is due and payable. Any person who commits an offence under the STR is liable to a fine not exceeding thirty thousand ringgit or to imprisonment for a term not exceeding two years or to both. Do note however that regulated fees for the licensing of gaming activities and online gambling activity are exempted from service tax while administration fees relating to the organising of betting and gambling activities are subject to service ta