The Department of Finance (DOF) said there will be no respite in its tax campaign versus tax-dodging Philippine offshore gaming operators (POGOs) and their service providers, as the government aims to secure a fresh revenue source by collecting unpaid income taxes from these errant companies.
Carlos Dominguez, DOF secretary, said in a statement yesterday a task force led by the Bureau of Internal Revenue (BIR) has so far temporarily closed down the operations of at least three tax-evading POGOs and collected an initial amount of about P1.2 billion from one of these online gaming companies.
Dominguez said it is unfair to Filipino taxpayers dutifully paying their taxes for these POGOs to continue with their tax-dodging practices.
“Basically we’re going hard against people who are evading taxes,” Dominguez said.
The shutdown of these firms was in compliance with Dominguez’s instructions for the BIR to crack down on POGOs and their service providers that fail or refuse to pay the tax liabilities of their foreign workers.
The finance chief has also ordered the BIR to file the appropriate cases against tax-dodging POGO firms.
Just yesterday, the BIR said it closed down the unregistered POGO branches of New Oriental Club88 Corp. (NOCC) in Parañaque City.
The BIR said in its statement NOCC operates as a customer relations service provider and live studio streaming provider with its main office located at Makati City and several branches in Parañaque City.
The tax agency said based on its investigation, NOCC has unregistered branches as certified by the Revenue District Office No. 052-Parañaque City, which has the jurisdiction
over the said branches, in violation of Section 115 (b) of the Tax Code.
“We are closing it down because it is not registered with the BIR. Under the BIR rules if you are not registered, we have to close down the establishment. The main branch is registered but (some of) its branches are not. Similar to some bus companies, the one with the franchise is registered but it has a lot of colorum (vehicles),” Arnel Guballa, BIR deputy commissioner, said at the sidelines of the closure activity conducted yesterday.
“We are closing 11 branches of NOCC. So in this particular building, we have 600 Chinese foreign workers. For today’s (simultaneous) operation we are accounting for 6,700 Chinese workers in these 11 branches. This is only based on our record, but we have also some information that it is more than 6,700. We are not yet sure, but maybe around 18,000,” Guballa added.
However, an industry source said only one of the 11 locations is operational while the rest are under construction.
Guballa said the BIR is still estimating the company’s possible tax liabilities.
“They are not registered, and BIR Parañaque has certified that they have not received tax payments (from the company). So in short, the burden of proof is on their part. We have to really close this establishment like this because they are not complying with our tax laws,” Guballa said.
Last Sept. 25, the BIR also ordered the temporary closure of the operations of Great Empire Gaming and Amusement Corp. (GEGAC) for failure to pay the correct amount of taxes to the government.
After initially paying P250 million, and the issuance of an undertaking to settle its remaining tax arrears of P1.050 billion in three separate monthly payments covered by postdated checks, GEGAC was allowed by the BIR to resume operations last Sept. 27.
GEGAC was also required to update its withholding tax payments and register its employees with the BIR.
Last Oct. 17, the BIR also padlocked the head office in Parañaque City and branch in Pasay City of Altech Innovations Business Outsourcing for failing to register as a value-added tax (VAT) taxpayer, which is in violation of Section 115(b) in relation to Section 236 of the National Internal Revenue Code.
According to the BIR, it has so far collected P1.63 billion in withholding taxes from POGOs and their service providers covering the period from January to August this year.
These online gaming firms paid P175 million in withholding taxes in 2017 and P579 million in 2018.
Guballa said the bureau has so far listed 218 POGOs and their service providers with a total of 108,914 foreign workers.