COLOMBO (AFP) - Sri Lanka's new government on Thursday scrapped generous tax concessions for foreign-funded resorts and banned them from including casinos after opposition by the country's influential Buddhist monks.
Prime Minister Ranil Wickremesinghe said the government would pull with immediate effect tax breaks for three luxury resorts that had been given the green light to open in Colombo with high-end gambling houses.
"We will not allow casinos on their premises," the premier told lawmakers.
The previous government led by Mahinda Rajapakse had introduced measures - including a five percent tax rate for the resorts - in a bid to turn the Sri Lankan capital into a gambling hotspot, despite resistance from Buddhist monks.
President Maithripala Sirisena, who swept to victory in Jan 8 elections backed by the country's main party of monks, pledged to end the breaks during his campaign.
Thursday's moves place a question mark over the future of Australian gambling mogul James Packer's plans to build a US$350 million (S$440 million) luxury hotel with a casino.
The other two mega resorts are a US$650 million development by local conglomerate John Keells Holdings, which has foreign shareholders, and a US$300 million project by local businessman Dhammika Perera, who has sought overseas funding.
None of the proposed gambling operations have opened in Colombo yet, but several small, local, low-key casinos have been in operation for decades, exploiting legal loopholes.
Packer's proposed 450-room Crown Sri Lanka resort - which once promised on its website to offer "world-class gaming facilities" - is yet to begin construction.
Government spokesman Rajitha Senaratne said the operations of existing local casinos would also be reviewed.
"We are told there are two or more casino licences in the country, but we want to see the legal basis of those operations," Ms Senaratne said. "We will review all this." Finance Minister Ravi Karunanayake said he would give existing local casinos, thought to number about five, a deadline of mid April to pay a flat fee of one billion rupees (US$7.6 million) to remain in business.