President Rodrigo Duterte’s chief economic manager on Tuesday (May 5) reiterated that only registered and tax-complaint Philippine offshore gaming operators (Pogos) can resume operations during quarantine as the government seeks to collect more revenues to be spent on COVID-19 response.
“No Pogo will be allowed unless they are compliant with all government laws and regulations, including, but not limited to, those involving health and taxation,” Finance Secretary Carlos G. Dominguez III said.
But even as Malacañang had classified Pogos as similar to business process outsourcing (BPO) firms, Dominguez said that this doesn’t exempt gaming companies from paying franchise taxes to the state-run regulator Philippine Amusement and Gaming Corp. (Pagcor).
“There must be express provision of law granting tax exemption,” Dominguez said, citing a statement from the Bureau of Internal Revenue (BIR).
The government had been running after errant Pogos that did not remit their foreign—mostly Chinese—workers’ withholding taxes as well as firms that did not pay corporate income and franchise taxes.
Last February, the BIR shuttered an allegedly tax-evading Pogo licensee after previously shutting down four Pogo service providers.
Pogo licensees tap service providers to actually communicate with their clients—online gamblers outside the Philippines, mostly in China.
As of early this year, around 60 Pogos had been issued licenses to operate by Pagcor, while 218 service providers employing over 108,000 foreigners had registered with the BIR.
The government had wanted to collect from Pogos P2 billion in taxes per month.
Last year, the government collected P6.42 billion in additional corporate and personal income taxes as it ran after alleged tax-deficient Pogos.
Edited by TSB
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