The Department of Finance (DOF) has ordered the shutdown of operations of Philippine offshore gaming operators (POGOs) and their service providers that fail or refuse to pay the tax liabilities of their foreign workers, and to file the appropriate cases against these tax-dodging companies.
Carlos Dominguez, DOF secretary, issued the directive to the Bureau of Internal Revenue (BIR) after the tax agency reported the slow pace of collections of withholding income taxes from POGOs, despite the issuance of 130 letter-notices to these firms with tax liabilities amounting to P21.62 billion combined.
“Why don’t we start closing them down so they will answer these assessments. Those who don’t pay or respond to your assessments, clamp them down,” Dominguez said during a meeting with members of an interagency task force monitoring the entry of foreign workers in the country.
“Close down organizations that don’t withhold and remit the proper amount (of) taxes from their employees. This will be done together with DOLE (Department of Labor and Employment), DOJ (Department of Justice), Bureau of Immigration (BI), OP (Office of the President), and PAGCOR (Philippine Amusement and Gaming Corp.),” he also told reporters over the weekend.
Asked how soon this will be done, Dominguez responded, “ASAP.”
Arnel Guballa, BIR deputy commissioner, said his office cannot do the job of padlocking errant POGOs alone and asked the assistance of DOLE, BI and PAGCOR in closing down errant POGOs.
During the interagency meeting, Guballa reported POGO service providers paid P175 million in withholding taxes in 2017 and P579 million in 2018. From January to August 2019, the BIR collected P1.4 billion from POGOs, representing a 242 percent increase from the previous year’s collections, he said.
Dominguez told the BIR to ensure that payment of the tax liabilities should account for each foreign worker in POGOs and to reject any “lump sum” offer or any other arrangement in paying their tax arrears.
“The collection should be per individual. You force the issue and you bring them to court. I mean, close them down,” Dominguez told officials of the BIR.
