SEN. Joel Villanueva yesterday called for a temporary cessation to the operations of Philippine Offshore Gaming Operations (POGOs) until government has come up with rules to regulate their operations.
Villanueva, chair of the Senate labor, employment, and human resources development committee, noted the seeming inability of government agencies, such as the Department of Labor and Employment (DOLE), Philippine Amusement and Gaming Corp. (Pagcor), Anti-Money Laundering Council (AMLC), Bureau of Internal Revenue (BIR), and Bureau of Immigration (BI), among others, to control POGO operations, a big number of which are believed to be engaged in illegal activities.
“I think i-suspinde muna ang POGO operations hanggang hindi natin naaayos ang ating patakaran. Ang mga ahensiya ng gobyerno ay hindi pa nakikita ang kanilang sarili para iregulate ito (I think there is a need to temporarily suspend POGO operations until all concerned government agencies find ways on how to regulate its operations),” Villanueva said after the hearing conducted on the effects of the influx of foreign workers in the country.
“It appears that POGOs do not really generate jobs for Filipinos because these POGOs employ primarily foreign nationals. What’s worse is that foreign workers in POGO-related establishments are not properly paying taxes,” Villanueva said.
The senator, referring to data from the labor department, said close to 7,000 illegal workers were arrested in legal POGO operations.
If this is the case, he added, more can be illegally working in unregistered POGO outlets.
He said many of the illegal workers initially enter the country as tourists then allegedly pay grease money to labor and immigration officials to get a working permit.
Aside from the illegal workers, Villanueva said government has also been losing between P2billion to P3 billion in uncollected withholding taxes on the POGOs, aside from the P50 billion in other taxes not collected from them annually.
Another issue is the thriving prostitution trade spurred by the influx of foreign workers in the country
He also cited reports that 733 foreign fugitives entered the country last year “under the pretense of working here.”
“We must heed the utmost urgent importance of finding concrete solutions for these concrete concerns. I think very seriously of the propriety of suspending the licensing of POGOs for now until our concerned government agencies get their acts together,” Villanueva said.
Meanwhile, Senate president pro-tempore Ralph Recto filed a bill seeking to impose a 30-percent income tax and five (5) percent franchise tax on offshore online gaming operations in the country.
Recto said Senate Bill No. 1295 seeks to establish a tax regime for POGOs, which are duly licensed and authorized by the Pagcor to provide online gambling services to players outside the Philippines.
The bill covers POGO companies in the Philippines, local gaming agents and POGO service providers.
Despite the fact that online gambling is a growing industry in the Philippines, Recto said the nature of its business activity creates confusion in the enforcement of the country’s existing laws.
Under Pagcor rules and regulations on POGO operations, licenses are issued to Filipino-based or foreign-based operators. Service providers that form part of the components of the POGO gaming operations such as gaming software provider, business outsourcing provider and content streaming provider are likewise required to secure a license.
Under the Recto bill, licensed Philippine-based POGOs, local gaming agents and service providers shall be subjected to a 30-percent income tax, the taxable amount will be derived in the preceding taxable year from all sources within and outside of the Philippines.
Foreign-based POGOs shall also be subjected to a 30-percent income tax based on their gross income derived from game offerings or facilities located within the Philippines.
On top of the 30-percent income tax, Recto’s bill also proposes the imposition of a five-percent franchise tax on all gross receipts derived from gaming operations of both Philippine and foreign-based POGO operators.
