Philippine offshore gaming operators (Pogo) must first pay 2019 tax and franchise dues before they could resume operations, though partial, as the country is in varying stages of lockdowns prompted by the COVID-19 pandemic, according to Finance Secretary Carlos G. Dominguez III.
“In order for Pogo service providers to be allowed to operate, they must pay their 2019 income tax liabilities,” Dominguez said.
“In the case of Pogo franchisees, the franchise tax of 2019,” he added.
Licensed Pogos’ franchise tax must be paid to the state-run regulator Philippine Amusement and Gaming Corp. (Pagcor), while income and other taxes were being collected by the Bureau of Internal Revenue.
Dominguez added that prior to resumption of operations, service providers and license holders must also remit to the BIR all current 2020 taxes withheld from their employees, mostly Chinese.
“They must also execute an undertaking to pay the BIR all their arrears. Once these are complied with, the BIR will issue a tax clearance to enable them to operate,” Dominguez added.
The BIR already pushed back the deadline to file and pay 2019 income tax returns (ITRs) thrice after the initial one-month enhanced community quarantine imposed in Luzon and other parts of the country since mid-March had been extended twice—the latest until mid-May in areas that have high COVID-19 cases.
But Internal Revenue Deputy Commissioner Arnel S.D. Guballa told the Inquirer on Friday that “Pogos should pay their annual ITRs now” if they wanted to restart operations the soonest.
As of early 2020, at least 60 Pogos had been issued licenses to operate by Pagcor, while 218 service providers employing over 108,000 foreigners had registered with the BIR.
Pogo license holders tap service providers to actually communicate with clients—online gamblers outside the Philippines, mostly in China.
The government had been running after errant Pogos that did not remit their foreign—mostly Chinese—workers’ withholding income taxes as well as those which did not pay corporate and franchise taxes.
The government had wanted to collect from Pogos P2 billion in taxes per month—additional revenues which officials earlier said could fund COVID-19 response.
Last year, the government collected P6.42 billion in additional personal and corporate income taxes as it ran after tax-deficient Pogos.
In a statement on Friday (May 8), companies belonging to the Accredited Service Providers of Pagcor (Aspap) said that they “will be observing all protocols established under the ECQ” as “the safety of everyone is a top priority.”
“We wish to reassure our legislators and the public that resumption of Pogo operations would not undermine the ECQ or pose unnecessary health risk to the community,” said Aspap spokesperson Margarita Guttierez.
“Aside from stringent health and safety protocols imposed as prerequisite to reopening, only 30 percent of the workforce mostly Filipinos, who must test negative for COVID-19, are allowed to return to work,” Guttierez said.
“So far, no cases of COVID-19 have been attributed to the Pogo industry while its employees are advised against congregating in venues accessible to the general public,” the statement said.
“In the same breath, we wish to underscore that our operations shall be an important component in the country’s road to recovery from the devastating effects of the pandemic plague,” it added.
“Moving forward, we can only hope that a smoother cooperation between the private and public enterprises shall take precedence over any misimpression or miscalculation,” Gutierrez said.
She said Aspap “welcomes the proposed Senate inquiry of Senators Francis Pangilinan and Risa Hontiveros on the partial resumption of Pogos” as it will be “an opportunity to clear the concerns raised and clarify any disinformation.”
Edited by TSB
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