The Pinoy Business Chronicle

Business news and analysis. Covering financial news, economic issues, stock market data, local business, business policy and more.

Philippines Economy News

Fast track sought for measure closing POGO tax loophole

fast track sought for measure closing pogo tax loophole - Fast track sought for measure closing POGO tax loophole

THE House of Representatives needs to fast-track a measure closing a loophole in a tax law authorizing the collection of a 5% franchise tax from Philippine Offshore Gaming Operators (POGOs), a senior legislator said.

Representative Jose Maria Clemente S. Salceda of Albay issued the statement after the Supreme Court granted the petition of 14 foreign-based POGOs to prevent the Bureau of Internal Revenue (BIR) and the Department of Finance from collecting the franchise taxes from POGOs, as outlined in Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II). The tax would have raised billions in additional revenue to boost the treasury for pandemic measures.

“They can’t say they are Chinese operations, because gambling is illegal in China. They are Philippine operations. And my bill closes the ambiguity by stating in black and white that they are in fact doing business in the Philippines,” he said in a statement.

Mr. Salceda, chairman of the House committee on ways and means, last year filed House Bill No. 5257, which seeks to impose a 5% franchise tax on all POGOs on gross receipts derived from gaming operations.

The measure also proposes a 25% withholding tax on foreign POGO workers with a minimum threshold of P600,000 per annum. The proposed tax rates would raise a total of P45 billion for the national government, Mr. Salceda said.

The proposed legislation should “sail smoothly” this month since the two chambers of Congress “both agreed on the POGO taxes in Bayanihan II,” Mr. Salceda said.

“My bill would make it a case of tax evasion to (neglect) reportorial requirements. There’s a very thin case for slapping POGOs with tax evasion in the current law.”

The BIR earlier reported that only 10 out of 60 licensed POGOs in the country paid tax. The Philippine Amusement and Gaming Corporation (PAGCOR) in mid-June last year confirmed that some POGO firms have left the Philippines due to the government’s restrictions on the industry and the impact of the coronavirus pandemic on business activity.

The gaming regulator has been pushing for the resumption of POGO operations during the quarantine. — Kyle Aristophere T. Atienza

Leave a Reply

Theme by Anders Norén