POGO shut down for tax violation

Angel Movido, ABS-CBN News

Posted at Sep 25 2019 10:16 AM | Updated as of Sep 25 2019 02:10 PM

Video courtesy of Finance Assistant Sec. Tony Lambino

MANILA - The government has shut down a Philippine offshore gaming operator (POGO) for tax violations, the country's Finance minister said on Wednesday.

"POGO service provider Great Empire Gaming and Amusement Corp (GEGAC) is being shut down for lack of registration for VAT purposes," Finance Secretary Carlos Dominguez said in a statement. Dominguez said this was a violation of the tax code.

GEGAC has 8,100 foreign employees, of which 2,000 are employed in their office in Quezon City, said BIR Deputy Commissioner for Operations Arnel Guballa. The POGO operated in a still-unfinished building in Libis, Quezon City where it occupied the 4th to the 19th floors. 

He said that while GEGAC's main office was registered in Subic, and thus enjoyed tax perks, its operations in Quezon City were not registered with the BIR. 

“We sent them letters to comply na. We gave them due process. Nag-lapse na yung period to comply. We sent the letters as far as 2 to 3 months ago,” Guballa said.

Officials from the BIR did not say how much GEGAC owed in unsettled taxes.

There are 60 offshore gaming operators currently licensed to do business in the country, according to the country's gaming regulator. 

The Philippine Amusement and Gaming Corporation (PAGCOR) however has already suspended applications for new POGO licenses.

An interagency body tasked to probe offshore gaming estimates there are roughly 138,000 Chinese workers in the internet-based POGO business.

Guballa meanwhile said the BIR estimates more than 100,000 of these foreign workers don't pay proper taxes.

“Kasi unfair sa ating Pilipino di ba? Sweldo natin, kaltas agad tapos sila nagtatrabaho dito. Unfair yun di ba? Kailangan magbayad sila,” Guballa said. 

(It's unfair to us Filipinos. Our wages are taxed automatically. They work here. It's unfair. They should pay.) 

The Department of Finance earlier said POGOs and their service providers will be shut down if they fail or refuse to pay proper taxes.