The taxes collected from Philippine offshore gaming operators (POGOs) and their service providers jumped by 169 percent in 2019, following the government’s campaign against errant POGO firms.
The Department of Finance (DOF) said in a statement over the weekend the government was able to generate P6.42 billion in taxes from the industry last year, P4.04 billion higher than the P2.38 billion generated from these businesses the previous year.
According to the DOF, the Bureau of Internal Revenue (BIR) collected P5.13 billion in withholding taxes, P644.07 million in income taxes, P91.13 million in value-added taxes and percentage taxes, P81.11 million in documentary stamp taxes and P469.13 million in other taxes from POGOs.
Arnel Guballa, BIR deputy commissioner, told reporters in an interview at the DOF office in Manila last week many POGO companies have expressed their desire to comply with tax regulations.
“A lot of companies are going to our office, and they also want to get a license, and once they have a license, (they will) comply with all the laws,” Guballa said.
“Our collections have improved, but some have said that starting the beginning of this year, they will comply. They will register their employees. But we heard from sources that employees come and go, that’s why it’s hard to see the total number of employees,” he added.
Since March 2019, Carlos Dominguez, DOF secretary, had been holding been meeting officials of various government agencies responsible for collating data on foreign nationals working here to firm up a plan on how the government can effectively collect an estimated P22 billion in taxes from these workers employed in POGOs and other related industries based in the country.
Guballa had initially estimated around 103,000 foreign workers in the POGO industry, and finally came up with a list of about 108,914 employed by 218 POGO service providers after cleaning up data provided by the Philippine Amusement and Gaming Corp., Department of Labor and Employment (DOLE), Bureau of Immigration and the ecozones.
The BIR’s target is to collect at least P2 billion a month from POGOs, Guballa said.
“We are trying to hit that (P2
billion),” he said.
Guballa also said the government’s campaign to ensure strict compliance among POGOs did not discourage industry players to continue doing business in the country.
“Our trend shows that they are coming (out) in the open. Some companies are starting to declare the number of employees that they have,” Guballa said.
“No (they weren’t discouraged). They realized that they should comply because the government is continuously cracking down,” he added.
The BIR earlier temporarily shuttered the operations of at least four companies operating as POGO service providers which have either failed to register their operations as such allowing them to evade paying the correct taxes to the government, or are registered but not paying the correct amount of taxes.
Dominguez said there will be no letup in this ongoing crackdown as the BIR further steps up its campaign against errant POGOs in 2020.
“Basically we’re going hard against people who are evading taxes,” he said.
To further firm up the campaign against delinquent POGOs, Dominguez said he is supporting in principle a plan by Albay Rep. Joey Salceda to impose additional taxes on the online gaming industry.
These taxes include a 5 percent franchise tax and 15 percent tax on the salary of any individual who is a permanent resident of a foreign country and employed by a licensed offshore gaming enterprise.
The BIR is also working with DOLE in developing an interagency database of foreign nationals working in the country to effectively monitor them and ensure that they pay the correct amount of taxes to the government.
