MANILA, Philippines — While the government has already required Philippine offshore gaming operators (POGOs) to first pay all of their tax dues before resuming operations during quarantine, compliance to the taxman was still negligible.
Asked by the Inquirer how many POGOs had yet to settle their mandatory tax payments, Internal Revenue Commissioner Caesar R. Dulay replied: “Marami, halos lahat [Many, almost all of them].”
But Dulay said that he did not have exact figures at the moment.
As of early this year, about 60 POGOs were issued licenses to operate by the state-run regulator Philippine Amusement and Gaming Corp. (Pagcor), while 218 POGO service providers employing more than 108,000 foreigners—mostly Chinese—had been registered with the Bureau of Internal Revenue (BIR).
POGO licensees tap service providers as the ones to serve their clients—online gamblers outside the Philippines, mostly in China.
On Saturday, the Department of Finance (DOF) reiterated in a statement that BIR was “making sure that POGOs and their respective service providers are properly registered and will pay the correct amount of income taxes and franchise fees to the government before they are allowed to resume operations during the quarantine period.”
DOF was referring to the BIR’s Revenue Memorandum Circular (RMC) No. 46-2020 signed by Dulay on May 7 containing the specific guidelines and requirements issued by Deputy Commissioner and POGO task force head Arnel S.D. Guballa last May 6, both of which laid down the strict rules on how POGO licensees, as well as service providers, can obtain clearance to restart operations.
“According to the set of guidelines and requirements issued by the BIR, all POGO licensees or operators should first show proof that they have already paid their 2019 franchise taxes, their withholding taxes due for the months of January to April this year, as well as the first-quarter payments of their 2020 franchise tax, before they would be given tax clearances allowing them to resume operations,” DOF said.
“POGO service providers, meanwhile, are similarly required to submit proof that they have paid their 2019 income taxes; and remitted and paid withholding taxes for the months of January to April this year, including the 25-percent final withholding tax due from their foreign employees, before the BIR would give them tax clearances to reopen for business,” DOF added.
According to DOF, even tax-compliant service providers “would not be issued tax clearances by the BIR should their POGO operators or licensees fail to comply with the bureau’s new requirements.”
“All POGO licensees, operators, and service providers should also submit a notarized undertaking affirming their commitment to pay all tax arrears for prior years of their operations and should be registered with the respective revenue district office (RDOs) having jurisdiction over their places of business,” according to DOF.
BIR also required POGOs and service providers to disclose the monthly regulatory fees they paid to Pagcor during past years.
Guballa warned that “failure to comply will result in the denial of the issuance of a BIR clearance for resumption of operations.”
Also, “submission of falsified or fraudulent documents shall result in the denial” of the mandatory BIR tax clearance, Guballa said.
Besides these stringent tax rules, “all POGOs and their service providers must also strictly adhere to the government’s safety and health protocols such as limited operations per shift, shuttle services for employees, regular body temperature checks and disinfection within the workplace, social distancing, and wearing of masks, among other measures to prevent transmission” of COVID-19, DOF said.
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