MANILA— President Rodrigo Duterte has approved a law setting up a tax regime for Philippine Offshore Gaming Operators (POGOs), Malacañang said on Thursday.
Duterte on Wednesday signed Republic Act 11590 taxing POGOs, said his spokesman Harry Roque.
"Bahagi ito sa ating mahigpit na pagri-regulate ng lahat ng klase ng gambling at pagbabawal ng ilegal na sugal," he said in a press briefing.
(This is part of our tough regulation of all kinds of gambling and prohibition of illegal gambling.)
Foreigners working in POGOs, "regardless of term and class of working or employment permit or visa," shall pay a final withholding tax of 25 percent on their gross income. The minimum monthly withholding is at P12,500, according to a copy of RA 11590.
The non-gaming revenues of Philippine-based offshore gaming licensees shall be subject to an income tax of 25 percent, added the law.
RA No. 11590.pdf
The law mandates that 60 percent of total revenue collected from the gaming tax shall be used exclusively for the following:
- 60 percent for the universal health care program
- 20 percent for the enhancement of medical facilities
- 20 percent for "sustainable development goals"
However, the law also said the state "recognizes that revenues generated from gambling are not a sustainable source of income."
"The State further recognizes that all forms of gambling have consequences to Philippine society in general, and to Filipino families, in particular," it said.
The recognition of legal forms of gambling "shall not be construed as favorable state endorsement," said the law.
POGOs in 2019 yielded P6.42 billion in collections, Sen. Pia Cayetano earlier said.
However, the government could have collected around P38 billion from POGOs that year alone, said Cayetano, chairperson of the Senate Committee on Ways and Means.
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. Before they could reopen, they were asked to settle tax liabilities.
Last month, a Philippine Amusement and Gaming Corporation official said the number of POGOs in the country has been reduced to half as many have moved to other countries.
Video courtesy of PTV