Philippine Offshore Gaming Operators (POGOs) have “under-declared” their tax obligations to the government which, for this year alone, already runs to almost P2 billion, according to Senator Sherwin Gatchalian.

The tax leakage, according to Gatchalian, was uncovered when he conducted his own research based on the POGOs’ settled gross gaming revenues to the Bureau of Internal Revenues and the Philippine Amusement and Gaming Corporation (PAGCOR).

Gatchalian, chairman of the Senate ways and means committee, said the government should have collected more taxes and fees from legitimate POGOs.

From his own computation, legitimate POGOs have an estimated tax leakage of P1.9 billion, citing the discrepancy of gross gaming revenue reported by the BIR and PAGCOR from January to August 2023.

“It’s regrettable that even legitimate POGOS are remiss in the payment of correct taxes. This is exactly the reason a tax regime for POGOs was put in place which is to reduce uncollected taxes due to the government. It is lamentable that even licensed POGOs continue to disregard accurate payment of taxes,” Gatchalian said.

A statement released by Gatchalian’s office stated that “indicative gross gaming revenue from January to August this year, based on 5% gaming tax payments made to the BIR by POGO operators, totaled P28.36 billion. However, the 2% regulatory fee payments to PAGCOR show indicative gross gaming revenue for the same period at P66.67 billion. Furthermore, PAGCOR’s account receivables from POGOs over the same period were estimated at P2.3 billion.”

“Research shows that we are not realizing the full benefits of allowing POGO operations in the country. It’s high time we consider developing other industries that are sustainable, high-yielding, and long-term businesses,” he said.

Senate Minority Leader Aquilino “Koko” Pimentel III, meanwhile, said the government’s projected income from POGOs during their conceptualization period was somewhere between P30 billion to P40 billion, in contrast to the actual collection of just around P3 billion to P5 billion.

Gatchalian’s findings, the senator said, have underlined that the Philippines is not gaining anything from POGOs.

“It’s not even a desirable business activity. Tapos the types of people that you are attracting to our country… para sa akin overwhelming na talaga yung reasons to reverse our policy on POGO,” Pimentel said.

Last week, Senator Imee Marcos said the lease of POGOs in the country will still good for two years.

But revoking those lease contracts according to Pimentel, will not result in any legal issue given the problems that POGOs are bringing into the country.

However, he said the government must also look at the humanitarian angle.

“Out of humanitarian consideration, maybe a transition period. But we do not let the POGOs dictate the length of their stay here through their lease contracts. Hindi pwede yun sila na naka-determine kung hanggang kalian sila mananatili sa bansa dahil mahaba ang kanilang lease contracts. Hindi. That’s their (POGO) fault,” Pimentel stressed.

While the Senate is doing its share to address the POGO issue, the better and faster way to really stop online gambling is for the executive to do the necessary action, the senator said.

According to Pimentel, the Senate has a “critical core” who are calling for the reversal of the POGO policy.

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