THE GOVERNMENT is targeting to collect around P60 billion from new taxes on Philippine Offshore Gaming Operators (POGOs) and its employees in the first two years of implementation, according to a senator.
During the second day of interpellation for Senate Bill No. 2232 or the bill taxing the POGO industry, Senator Juliana Pilar S. Cayetano said the government expects to generate P28.7 billion in revenue this year and P32 billion in 2022 from the 5% gaming tax on POGOs, and the 25% final withholding tax on its employees.
Ms. Cayetano said the amount does not include other taxes on POGOs under the bill.
President Rodrigo R. Duterte certified the bill as urgent on Monday. It is one of the measures identified by the Legislative-Executive Development Advisory Council as priority measure targeted to be passed before Congress’ sine die adjournment on June 4.
Under the bill which sought to amend the National Internal Revenue Code, all offshore gaming licensees, whether based in the Philippines or abroad but are considered doing business in the country, will have to pay 5% gaming tax on gross gaming revenues or receipts derived from their gaming operations. The gaming tax will be in lieu of all taxes.
Foreigners employed by POGOs and service providers will be subject to 25% final withholding tax rate.
The bill also provided that the minimum final withholding tax for any taxable month from foreigners employed by offshore gaming operators and service providers should not be lower than P12,500.
Non-gaming revenues of Philippine-based offshore gaming licensees shall also be subject to 25% income tax.
Non-gaming revenues attributed to game offerings or facilities within the Philippines of foreign-based offshore licensees shall be subject to income tax equivalent to 25% of gross income yearly.
Based on data from Philippine Amusement and Gaming Corp. (PAGCOR),
Ms. Cayetano said there were 38 Philippine and foreign-based offshore gaming operators, 24 local gaming agents and 136 service providers as of March 2021.
On the other hand, data from the Bureau of Internal Revenue (BIR) showed there were 43 Philippine and foreign-based offshore gaming operators, 24 local gaming agents and 232 service providers, the senator said.
No explanation was given for the discrepancy in data, Ms. Cayetano said, adding she would require agencies to share information more efficiently.
Ms. Cayetano in her sponsorship speech on May 25 said POGO collections in 2020 amounted to P7.18 billion, 11.71% higher than the P6.42 billion collected in 2019, citing data from the BIR.
Some POGOs have left the country due to the new tax requirements, PAGCOR said in June 2020. — Vann Marlo M. Villegas