8 of 11 licensed POGOs refuse to pay licensing fees: BIR

Katrina Domingo, ABS-CBN News

Posted at Mar 05 2020 05:58 PM

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

MANILA - Eight of the 11 Philippine Offshore Gaming Operators (POGO) who currently have permits from the Philippine Amusement and Gaming Corporation (PAGCOR) have been refusing to pay licensing fees, a tax official said Thursday, as a Senate panel studied if internet gambling should still be allowed in the country.

Among 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 Bureau of Internal Revenue (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 told senators.

It was the Office of the Solicitor General that said that "foreign-based operators are not liable to 5 percent (franchise tax)," said Dave Fermin Sevilla, who chairs PAGCOR's Anti-Money Laundering Supervision and Enforcement Department.

In 2019, Solicitor General Jose Calida said that POGOs cannot be taxed because offshore operations are considered outside the Philippines. Economic officials had refuted Calida's opinion, saying the Department of Finance has been pushing to tax the Chinese-run sector.

The BIR collected some P6.4 billion in taxes from POGOS in 2019, Guballa said. This is about 13 percent of the P50 billion the government expects to collect from the Chinese-run gambling firms.

Senators criticized PAGCOR and other agencies that have been defending continued operations of offshore gambling in the Philippines, as the firms have been linked to corruption and prostitution, among other crimes. 

"I am disappointed at the statement today of PAGCOR, saying that we are in favor of POGO continuing because of the income earned. That is a short range statement," Senate Minority Leader Franklin Drilon said.

"That statement, I must say, is such as stupid statement. Basta pera pumasok, lahat na (as long as money is coming in, everything), all these things we can tolerate," he said, referring to previous discussion about the spike in crime after POGOs were allowed in the country.

The Senate Blue Ribbon Committee will reconvene on March 12 to finalize plans of drafting a resolution that would permanently ban POGOs in the country.