Finance department orders shutdown of tax-evading POGOs


Posted at Sep 15 2019 01:02 PM | Updated as of Sep 15 2019 01:42 PM

MANILA -- (UPDATE) The Department of Finance (DOF) has ordered the Bureau of Internal Revenue (BIR) to shut down Philippine offshore gaming operators (POGOs) and their service providers that fail or refuse to pay taxes of their foreign workers.

The development comes following reports of slow collection from select operators whose tax liabilities amount to P21.62 billion despite the issuance of 130 letter-notices, the department said in a statement.
"Why don't we start closing them down so they will answer these assessments. Those who don't pay or respond to your assessments, clamp them down," Finance Secretary Carlos Dominguez said in an inter-agency meeting last Friday.

The BIR said it has so far collected P1.4 billion from POGOs from January to August 2019.

POGO service providers paid P175 million in withholding taxes in 2017 and P579 million in 2018, it added.

The bureau said it has coordinated with the Labor department, the Bureau of Immigrations and the Philippine's gaming agency in implementing the order.
At least 58 offshore gaming firms have licenses to operate in the Philippines. Some 138,000 foreign nationals are working in POGOs, an inter-agency body earlier said.

Some 12,000 foreign nationals were also found illegally working for POGOs, it added.

In August, the Philippine Amusement Gaming Corp. (Pagcor) suspended the acceptance of applications for new POGOs, saying some concerns needed to be addressed.

Almost P4 billion has been collected from POGO operations this year, while the target revenue for 2020 operations is between P9 billion and P10 billion, Pagcor said.

Meanwhile, labor group Trade Union Congress of the Philippines (TUCP) has urged government to create a coordinating body in managing and controlling POGOs amid Cambodia's recent move to ban online gaming.

“Government agencies have limited authority and they cease to function on area that is beyond their mandate. The dis-coordination between and among these agencies might cause government to entirely lose control of the industry," TUCP president Raymond Mendoza said.

"We have to learn from the Cambodian experience specifically in the aspect of government control over the entire aspects of the growing industry that has the potential to our economy."

The proposed coordinating body will be attached to the Office of the President and composed of concerned state agencies and labor and business sector representatives, the group said.