POGO Imposes New Tax Plan to Burden Operators

Cleaning up the industry seems like an ongoing job and long-term strategy for POGO (The Philippine Offshore Gambling Operator) as it brings a new tax plan up for discussion.

Albay representative, Joey Salceda, has recently filed an extension to the House Bill 5267, aiming to burden operators with a set of specific tariffs. The framework explains what taxes should be imposed on POGO employees, since they are practicing business in the country.

Despite the fact that income taxes have already been defined in the past, Salceda remains convinced POGO employees need a specific tax code applied to them individually. He adds:

“Codifying the tax regime for POGOs will provide the government a broader set of levers with which to monitor and oversee the industry and to stabilize the gyrations in tax revenue intake and enforcement.”

Tax Rate Hike a Good Idea

One week before presenting the new tax bill, Salceda received full support from the Department of Finance Secretary, Carlos Dominguez. However, he agreed on the framework without having a second opinion or knowing all the details of the newly presented bill. This move reminds of recent events from September when China urged the Philippines to entirely ban online gambling.

To clarify, it specifies a 15% tax on the salaries, wages, annuities, compensation, remuneration and other benefits for the employees, including honoraria or allowances. Likewise, the bill requires an additional 5% tax on gross receipts, demanded by the Bureau of Internal Revenue.

Further industry growth in the Philippines has already been severely damaged thanks to new pressures and outgoing tax collection. Now with $390 million in unpaid taxes, it is likely that operators will choose to leave than pay up, leading to a complete standstill of the sector.

“The inquiry is long overdue given the issues that have surfaced regarding the POGO industry. The fact that we cannot accurately account for these workers is troubling,” representative Bienvenido Abante Jr. said.

Altech Back in Business

Among the raided operators for not paying full tax bills was Altech, now entirely back on track. AIBC paid out a minor fine in the range of $160,000 to BIR and agreed to cash out the remainder of $720,000 in monthly installments.

It is exactly a bill like 5267 that operators will be required to pay, once calculated how much money the employees had failed to shell out in income taxes. Alongside is the VAT bill to compensate as well, says Arnel Guballa, BIR deputy chief, stating that the Bureau needs stronger manpower to speed up the process.

Representative Eric Go Yap has also announced a briefing with PAGCOR this November, which is to assist with tackling current POGO issues. If the new bill is adopted, the state will impose a gambling tax of $10,000 per table for live betting operations and $5,000 for RNG games.

Source:

“New POGO tax bill filed in the Philippines”, Derek Tonin, calvinayre.com, October 31, 2019.