Gov’t projects ₱60 billion in POGO taxes over the next 2 years

The Government is targeting to collect some ₱60 billion from new taxes on Philippine Offshore Gaming Operators (POGOs) and its employees in the first two years of implementation.

On the second day of interpellation for Senate Bill No. 2232, the bill taxing the POGO industry, Senator Juliana Pilar S. Cayetano said the government expects to generate ₱28.7 billion in revenue this year, ₱32 billion in 2022 from the 5% gaming tax, and a 25% final withholding tax on its employees.

The amount does not include other taxes on POGOs under the bill, Cayetano added.

President Duterte certified the bill as urgent on Monday as it is one of the measures identified by the Legislative-Executive Development Advisory Council as a “priority measure” targeted to be passed before Congress’ sine die adjournment on June 4.

Under the bill which sought to amend the National Internal Revenue Code, all offshore gaming licensees, whether based in the Philippines or abroad but are considered as doing business in the country, will have to pay a 5% gaming tax on gross gaming revenues or receipts derived from their gaming operations. Moreover, the gaming tax will be in lieu of all taxes.

Foreigners employed by POGOs and service providers will be subject to a 25% final withholding tax rate.

The bill also states that the minimum final withholding tax for any taxable month from foreigners employed by offshore gaming operators and service providers should not be lower than ₱12,500.

Non-gaming revenues of Philippine-based offshore gaming licensees shall also be subject to a 25% income tax.

Non-gaming revenues attributed to game offerings or facilities within the Philippines of foreign-based offshore licensees shall be subject to income tax equivalent to 25% of gross income yearly.

Based on Philippine Amusement and Gaming Corp. (PAGCOR) data, there are currently 38 Philippine and foreign-based offshore gaming operators, 24 local gaming agents, and 136 service providers as of March 2021.

Data from the Bureau of Internal Revenue (BIR), on the other hand, showed there were 43 Philippine and foreign-based offshore gaming operators, 24 local gaming agents, and 232 service providers. Moreover, it showed POGO collections in 2020 amounted to ₱7.18 billion, 11.71% higher than the ₱6.42 billion collected in 2019.

Cayetano said, no explanation was given for the discrepancy in data and added that she would require agencies to share their information more efficiently.

According to PAGCOR, some POGOs have already left the country due to the new tax requirements.

SOURCE: Business World