Duterte seeks passage of tax bill on POGOs

Jamaine Punzalan, ABS-CBN News

Posted at May 31 2021 07:03 PM | Updated as of May 31 2021 10:41 PM

Duterte seeks passage of tax bill on POGOs 1
Phil-Asian Gaming Expo features offshore games targetting bettors outside the Philippines. Games can be played on desktop or mobile devices. Photos taken at the SMX Convention Center. July 12, 2019. Jessica Fenol, ABS-CBN News/File

 MANILA — President Rodrigo Duterte is seeking the speedy passage of a bill setting up a tax regime for Philippine Offshore Gaming Operations (POGOs), Malacañang said on Monday. 

Duterte certified as urgent the proposed Act Taxing Philippine Offshore Gaming Operations, said his spokesman Harry Roque. 

"We hope that through this measure we would not only generate the much needed revenues in the country but also place the industry under stricter government oversight," he said in a statement. 

Bills certified as urgent are exempt from a rule requiring lawmakers to study the measure for at least 3 days before voting on it. 

Mostly Chinese-run, POGOs in 2019 yielded P6.42 billion collection in 2019, Sen. Pia Cayetano earlier said. 

However, the government could have collected around P38 billion from POGOs in 2019 alone, said Cayetano, chairperson of the Senate Committee on Ways and Means. 

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"The reason for this is because at present, nowhere under the National Internal Revenue Code... can we find explicit tax provisions pertaining to offshore gaming licensees, including gaming operators, gaming agents, and service providers," Cayetano said earlier this month, in a privilege speech backing POGO taxation. 

 "By addressing these gaps in our tax system, we can maximize the POGO industry's potential as a revenue source. In turn, we will have more resources in our country's coffers to fund programs that will improve people's lives and help us build back better following this global health and economic crisis," she added. 

The proposed bill will clarify that "all offshore gaming licensees, regardless of whether Philippine or foreign-based are considered doing business in the Philippines, and must pay 5 percent gaming tax on the gross gaming revenue or receipts derived from their gaming operations."

POGO workers "will be subject to the 25 percent withholding tax rate, considering that they are not engaged in trade or business within the Philippines," under the same measure, Cayetano said. 

Critics of the reopening of POGOs earlier cited alleged crimes linked to the industry, including bribery for the entry of Chinese workers, trafficking, prostitution, money laundering and tax violations, among others.   

POGOs were suspended in 2020, along with other non-essential businesses, when the COVID-19 lockdown was imposed. But before they could reopen, they were asked to settle tax liabilities. Several companies have exited since then.