DOF: Exiting POGOs subject to tax audit


    Some players in the Philippine offshore gaming operation (POGO) industry have started canceling their lease contracts due to lack of business amid clampdowns from the Chinese government, the country’s finance chief said.

    However, POGO entities in the country will have to undergo first an audit from the Bureau of Internal Revenue (BIR) before closing down to make sure the correct amount of taxes is paid.

    “Last night I got a call from one of the owners of a building in Makati who is saying that his POGO and service provider clients have started canceling their lease contracts for lack of business. I think the Chinese government is clamping down on money transfers, as well as lack of operators, because I think the Chinese government has also started canceling passports of those people servicing the POGO industry,” Carlos Dominguez, Department of Finance secretary, said during the Senate finance committee’s hearing on the agency’s 2021 budget.

    Dominguez however said in a Viber message to finance reporters yesterday that before a Philippine registered entity can close its business, it is required to get a clearance from the BIR.

    “This triggers an audit where the BIR can determine if they have paid the correct taxes,” Dominguez said.

    “The issue is not so much on POGO revenues but more on the impact to real estate values and businesses. Obviously, the income tax and value added tax collection from this sector will be affected,” he added.

    In June, the Philippine Amusement and Gaming Corp. (Pagcor) said several POGO companies have ceased operations, with more planning to leave.

    Jose Tria, Pagcor assistant vice president for offshore gaming licensing, then said several POGOs have decided to leave the country amid some issues on taxes slapped on the industry. (A. Celis)