KUALA LUMPUR (Oct 17): An increase to the tax Malaysian businesses are required to charge on services offered is seen as a negative for casino operator Genting Malaysia, with a direct impact seen on the company’s bottom line, according to Nomura Research.

Citing a weekend note by Nomura analysts on Monday, industry magazine Inside Asian Gaming (IAG) said the service tax increase is negative for the gaming sector, specifically Resorts World Genting operator Genting Malaysia and its parent Genting Berhad.

Last Friday, Prime Minister Datuk Seri Anwar Ibrahim presented Budget 2024, which included a 2% increase in the service tax from 6% to 8%.

The increase was made in lieu of introducing a goods and services tax (GST).

The Nomura analysts said that gaming companies have historically absorbed the service tax on gaming activities and so the increase in tax will affect their Ebitda margins negatively.

The analysts did, however, add that a 5% reduction in entertainment duty on theme parks, family recreation centres, indoor game centres and simulators is a “marginal positive” for the Genting firms.

Nomura also pointed to initiatives aimed at boosting Malaysia’s tourism industries, including planned improvements to Visa-On-Arrival facilities, the introduction of social visit passes and offering of Multiple Entry Visas to encourage inflow of tourists and investors, particularly those from India and China.

Malaysia is aiming to attract 26.1 million tourists by 2026, having already seen visitation triple year-on-year from 13 million through August 2023.