MANILA - The Philippine finance ministry supports the legislative move to increase taxes on offshore gaming operators in the country and their service providers, amid government efforts against tax-evading firms in the industry, an official said Wednesday.
Finance Assistant Secretary Tony Lambino said House Bill 5267, authored by Albay Rep. Joey Salceda, will help clarify tax-related issues on Philippine Offshore Gaming Operators (POGOs).
The bill seeks to impose a 5 percent tax on all offshore gaming companies on gross receipts derived from their operations covered by the law granting the franchise.
“Ang gusto niyang gawin ay gawing malinaw, na 'yung franchise tax na 5 percent ay kailangan talagang bayaran, kasi po may mga POGO na nagsasabi na dahil sa offshore sila, ay hindi sila pwedeng patawan ng 5 percent franchise tax,” Lambino said of the proposed law.
(What he wants is to make it clear that the 5 percent franchise tax should be paid by POGOs, since some of these POGOs say they must not be taxed because they're offshore.)
“Dahil nag-register po sila sa PAGCOR (Philippine Amusement and Gaming Corporation), by virtue of their registration by PAGCOR, ibig sabihin they have operations here in the Philippines.”
(Since they registered with PAGCOR, by virtue of their registration by PAGCOR, it means they have operations here in the Philippines.)
Last February, a task force from the Bureau of Internal Revenue (BIR) shut down an offshore gaming operator in Pasay City for failing to pay proper taxes from its 2019 earnings.
Synchronization Anywhere For You Inc (SAFYI) is the first POGO to be closed by government for failure to pay 5 percent franchise tax due for its gross gaming receipts for the year 2019 worth P114 million, the BIR said in a statement.
“Tuloy-tuloy po ang operations ng task force POGO. Tuloy-tuloy po ang pagsara ng mga hindi nagbabayad ng tamang buwis,” Lambino said.
(The operations of task force POGO continues. Those not paying the right taxes continue to be closed down.)
The BIR was able to collect a total of P6.4 billion in taxes from POGOs in 2019.
Although the amount is 169 percent higher than the 2018 collection, it is still far from the estimated P2 billion that government should be collecting every month from POGOs in withholding taxes.
An official of the BIR earlier revealed 8 of 11 POGOs that currently have permits from PAGCOR have been refusing to pay licensing fees.
Of the 11 current internet gambling licensees, only 3 POGO firms are paying the 5 percent Philippine franchise tax, said Arnel Guballa, deputy commissioner of the BIR.
"Their (POGOs) assertion is that, 'We are offshore, we are outside the Philippine jurisdiction.' But the contention of BIR is, 'Since you registered with PAGCOR, then you are under Philippine law,'" Guballa said in a Senate hearing.