SERVICE providers in the Philippine offshore gaming operator (POGO) industry are not eligible for any tax incentives even as Malacanang and the country’s gaming regulator consider them as business process outsourcing (BPO) companies, government officials said.
Jose Tria, assistant vice president for offshore gaming and licensing department of the Philippine Amusement and Gaming Corp. (Pagcor), said in a statement yesterday there are two entities being regulated by Pagcor in the online gaming industry: POGO operators which hold the offshore gaming licenses; and service providers that provide customer relations, IT support, gaming software as well as live studio and streaming.
“What we are referring to as BPOs are the POGO service providers, not the POGO operators,” Tria said.
He said POGOs are treated like other gambling entities, and subject to franchise tax, value-added tax and corporate income tax. He added that employees of POGO service providers are subject to withholding taxes.
“These service providers cannot avail of the tax privileges of PEZA (Philippine Economic Zone Authority) because they are not PEZA-registered entities,” Tria said.
Carlos Dominguez, Department of Finance secretary, likewise said in a Viber message to reporters yesterday that Malacanang’s classification of POGO service providers as BPO does not exempt them from paying the necessary taxes.
“Classification (as BPO) does not exempt (them from) tax,” Dominguez said.
“There must be express provision of law granting incentives,” he added.
Tria also said POGO operators have to remit license fees and regulatory fees to Pagcor as well as pay franchise tax with the Bureau of Internal Revenue.
POGO service providers are subject to corporate income tax and the withholding taxes for their employees, plus Pagcor’s accreditation fees.
Meanwhile, the Accredited Service Providers Association of Pagcor said in a separate statement its members are committed to pay all corporate and withholding taxes of its workers as they have always done so before the enhanced community quarantine.
“We pay our taxes and we will continue to pay. Period,” the group said.
